Which of the following factors would tend to increase the size of the premium on an options contract?Question 7Select one:a.The current short-term interest rates are highb.The option is near its expiration datec.The price volatility of the underlying asset is lowd.The option is far off its expiration date

For the buyer of an option, the premium paid for the contract represents the:Question 2Select one:a.transaction cost.b.maximum return.c.largest potential loss.d.yield.Clear my choice

In relation to options when interest rates decrease, the:Question 6Select one:a.price of call options generally increases.b.price of the underlying share usually decreases.c.price of put options generally increases.d.volatility of the underlying asset falls.

The longer the time to maturity, the ____ the call option premium and the ____ the put option premium.Select one:a. higher; higherb. higher; lowerc. lower; lowerd. lower; higher

The value of a put option rises when the underlying asset:Question 6Select one:a.has reduced volatility.b.has relatively short maturity.c.experiences price increases.d.experiences price falls.

You read in the Financial Times that the equity risk premium has increased overnight from 5.5% to 6.5%. Which of the following statements is least likely to be correct?Group of answer choicesThe market return is higher than the risk-free rateInvestors’ risk aversion has increasedThe beta of the market has increasedThe SML has a steeper slope