Mark owns both a March $20 put and a March $20 call on Alpha stock. Which one of the following statements correctly relates to Mark's position?

Mark owns both a March $20 put and a March $20 call on Alpha stock. Which one of the following statements correctly relates to Mark's position? Ignore taxes and transaction costs.    A.  A price decrease in Alpha stock will increase the value of Mark's call option. B.  A March $30 call is worth more than Mark's $20 call. C.  The time premium on an April $20 put is less than the time premium on Mark's put. (Assume both puts expire in the same calendar year.) D.  A price increase in Alpha stock from $26 to $28 will increase the value of Mark's put. E.  If the intrinsic value of Mark's put increases by $1 then the intrinsic value of his call must either decrease by $1 or equal zero. Refer to section 24.2

38.

Travis owns both a September $30 call and a September $30 put. If the call finishes at-the-money, then the put will:    A.  also finish in-the-money. B.  finish at-the-money. C.  finish out-of-the-money. D.  either finish at-the-money or in-the-money. E.  either finish at-the-money or out-of-the-money. Refer to section 24.2

39.

Which one of the following statements regarding employee stock options (ESOs) is correct?    A.  ESOs grant an employee the right to buy a fixed number of shares of company stock at the market price. B.  Employees must exercise their ESOs prior to those ESOs becoming vested. C.  Employees may forfeit their ESOs if they terminate their employment with the issuing firm. D.  If a firm issues ESOs it must make them available to all employees. E.  Employees can sell their ESOs if they do not want to personally exercise them. Refer to section 24.4

40.

Employee stock options are primarily designed to do which one of the following?    A.  provide employees with put options on their shares of company stock B.  provide an immediately vested benefit to key employees C.  influence the actions and priorities of employees D.  distribute excess cash to key employees to avoid corporate taxation E.  provide an immediate capital gain to certain employees Refer to section 24.4

41.

Employee stock options:    A.  usually have a positive intrinsic value when issued. B.  must be backdated at least six months to comply with Sarbanes-Oxley. C.  are generally "underwater" when issued. D.  are frequently repriced if the options are in-the-money. E.  are generally issued with a zero intrinsic value. Refer to section 24.4