1. The Option Pricing Model was developed by ________________.
a. Miller and Modigliani
b. Martin and Lewis
c. Black and Scholes
d. Ben and Jerry
2. _______________ risks have the potential for gains or losses.
a) Financial
b) Insurable
c) Pure
d) Speculative
3. Hedging activities and buying insurance are examples of _______________.
a) Risk Avoidance
b) Risk Reduction
c) Risk Retention
d) Risk Transfer
4. Executive stock options have all of these advantages except ____________.
a) Align managers with shareholders
b) Discourage risk taking
c) Higher reported incomes on the income statement
d) Retains good managers