Amy just purchased a right to buy 100 shares of LKL stock for $35 a share on June 20, 2012.

Assume the standard deviation of the returns on ABC stock increases. The effect of this change on the value of the call options on ABC stock is measured by which one of the following?    A.  theta. B.  vega. C.  rho. D.  delta. E.  gamma. Refer to section 25.3

6.	The sensitivity of an option's value to a change in the risk-free rate is measured by which one of the following?    A.  theta. B.  vega. C.  rho. D.  delta. E.  gamma. Refer to section 25.3

7.

The implied volatility of the returns on the underlying asset that is computed using the Black-Scholes option pricing model is referred to as which one of the following?    A.  residual error B.  implied mean return C.  derived case volatility (DCV) D.  forecast rho E.  implied standard deviation (ISD) Refer to section 25.3

8.	Amy just purchased a right to buy 100 shares of LKL stock for $35 a share on June 20, 2012. Which one of the following did Amy purchase?    A.  American delta B.  American call C.  American put D.  European put E.  European call Refer to section 25.1

9.

Which one of the following provides the option of selling a stock anytime during the option period at a specified price even if the market price of the stock declines to zero?    A.  American call B.  European call C.  American put D.  European put E.  either an American or a European put Refer to section 25.1

10.

Which one of the following best defines the primary purpose of a protective put?    A.  ensure a maximum purchase price in the future B.  offset an equivalent call option C.  limit the downside risk of asset ownership D.  lock in a risk-free rate of return on a financial asset E.  increase the upside potential return on an investment Refer to section 25.1