1. Indices measuring options market activity are simple to construct and widely quoted.

a. True

b. False

2. A put option increases in value when the stock price decreases. a. True

b. False

3. If there is one period remaining and no possibility of the option expiring in-the-money, the hedge ratio will be zero.

a. True

b. False

4. The law of one price states that the price of an asset cannot change.

a. True

b. False

5. The absence of a daily settlement is one of the factors distinguishing a forward contract from a futures contract.

a. True

b. False