1. The writer of a call option____________.
A) agrees to sell shares at a set price if the option holder desires
B) agrees to buy shares at a set price if the option holder desires
C) has the right to buy shares at a set price
D) has the right to sell shares at a set price
2. Nachman Industries just paid a dividend of D0 = $1.32. Analysts expect the company’s dividend to grow by 30% this year, by 10% in Year 2, and at a constant rate of 5% in Year 3 and thereafter. The required return on this low-risk stock is 9.00%. What is the best estimate of the stock’s current market value
a. $41.59
b. $42.65
c. $43.75
d. $44.87
e. $45.99
3. A stock has a correlation with the market of 0.59. The standard deviation of the market is 25%, and the standard deviation of the stock is 33%. What is the stock's beta?