1. What is a speculative premium?
a. The difference between a call and the intrinsic value
b. The difference between a warrant and a call
c. The difference between a put an a call
d. The difference between a warrant and its intrinsic value
2. The strike price of a contract specifies the price at which the securityarrow-10x10.pngarrow-10x10.png covered by an option may be bought or sold
True
False
3. A stock is selling for $42.50 with an option available at a $40 strike price. The 40 call option is price is at $6.50. What is the intrinsic value of the call?
a. -2.80
b. -5.60
c. 5.60
d. 2.80
4. Out of the money warrants are worth more than in the money warrants
True
False