7. Are these two statements correct? Statement 1: The put/call open interest ratio is the volume (number) of put contracts traded in a day divided by the volume (number) of call contracts traded in a day. Statement 2: The implied volatility is the return standard deviation that would cause the estimated value of an option (using an option pricing model) to be equal to the options current market price. A. Both statements are correct. B. Both statements are incorrect. C. Only Statement 1 is correct. D. Only Statement 2 is correct.

8. Are these two statements correct? Statement 1: When a company is both repurchasing shares and paying cash dividends, the analyst must value the stock using a TCFM (total cash flow model) instead of a DDM (dividend discount model). Statement 2: When a company substitutes share repurchases for cash dividends, this will result in a wealth increase for those shareholders who do not sell their shares. A. Both statements are correct. B. Both statements are incorrect. C. Only statement 1 is correct. D. Only statement 2 is correct.