6. An investor buys l 00 shares of A TN at 3 8 and 7...
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6. An investor buys l 00 shares of A TN at 3 8 and 7 /8 and buys one ATN October 40 put at 2 and 1/2. What is the investor's breakeven point?
a. 42 and 1/2
b. 41 and3/8
c. 40
d. 37 and 1/2
e. none of the above
7. An investor purchases 100 shares of xyz stock at 67 and 1 /2 and writes an at-the-money call for a total premium of $375. Margin requirements are at 50%. What is the net cash deposit that is required in his margin account?
a. 3,000
b. 2,000
c. 2,187.50
d. 3,375
e. none of the above
8. An investor who owns a call option can close out the position by any of the following types of transactions except
a. exercise
b. offset
c. expiring out-of-the-money
d. buying a put
e. none of the above
9. Consider a portfolio consisting of a long call with an exercise price of E, a short position on a non-dividend paying stock at an initial price of S and the purchase of riskless bonds with a face value of E and maturing when the call expires. What should such a portfolio be worth?
a. C + P-E(l+r)-T
b. C-S
c. p
d. p + s -E(l+r)-T
e. none of the above
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