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 greater the volatility of the underlying stock, the ____ the call option premium and the ____ the put option premium.Select one:a. lower; higherb. higher; lowerc. higher; higherd. lower; lower

A ________ option is an option to purchase a specified number of shares on or before some future date at a specified price, whereas a _______ option is an option to sell a specified number of shares on or before some future date at a specified price. ______ are bought if the share is expected to rise.Question 1Select one:a.put; call; Putsb.call; put; Putsc.call; put; Callsd.put; call; Calls

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

Assume you have the following 3 month options (and their premiums) on XYZ available, where So = $52.00: Call, K=$50.00, premium=$5.00 Call, K=$52.00, premium=$4.00 Call, K=$54.00, premium=$3.00 Put, K=$50.00, premium=$3.00 Put, K=$52.00, premium=$4.00 Put, K=$54.00, premium=$5.00 You construct a short $50.00/$52.00 strangle. If the underlying price at expiry is $60.00, what is the gain/loss on your strategy? (Note: Please show a loss as a negative number)