Question 5

Which one of the following will decrease the value of a put option?

1. An increase in the time to expiration
2. A decrease in the risk-free rate of return
3. An increase in the standard deviation of the return on the stock
4. An increase in the strike price
5. An increase in the price of the stock

Question 6

If a call has a positive intrinsic value at expiration, the call is___________.

1. Out of the money.
2. At the money.
3. Unfunded.
4. Funded.
5. In the money.