Traci wants to have $16,000 six years from now and wants to deposit just one lump sum amount today

Traci wants to have $16,000 six years from now and wants to deposit just one lump sum amount today. The annual percentage rate applicable to her investment is 6.8 percent. Which one of the following methods of compounding interest will allow her to deposit the least amount possible today?    A.  annual B.  daily C.  quarterly D.  monthly E.  continuous Refer to section 25.1

17.

The seller of a European call option has the:    A.  right, but not the obligation, to buy a stock at a specified price on a specified date. B.  right to buy a stock at a specified price during a specified period of time. C.  obligation to sell a stock on a specified date but only at the specified price. D.  obligation to buy a stock some time during a specified period at the specified price. E.  obligation to buy a stock at the lower of the exercise price or the market price on the expiration date. Refer to section 25.2

18.	In the Black-Scholes option pricing formula, N(d1) is the probability that a standardized, normally distributed random variable is:    A.  less than or equal to N(d2). B.  less than one. C.  equal to one. D.  equal to d1. E.  less than or equal to d1. Refer to section 25.2

19.

In the Black-Scholes model, the symbol "σ" is used to represent the standard deviation of the:    A.  option premium on a call with a specified exercise price. B.  rate of return on the underlying asset. C.  volatility of the risk-free rate of return. D.  rate of return on a risk-free asset. E.  option premium on a put with a specified exercise price. Refer to section 25.2

20.

Which of the following affect the value of a call option? I. strike price II. time to maturity III. standard deviation of the returns on a risk-free asset IV. risk-free rate    A.  I and III only B.  II and IV only C.  I, II, and IV only D.  II, III, and IV only E.  I, II, III, and IV Refer to section 25.2