Question1 Choose one answer

Question2 choose one answer

Question 3 In your own words, briefly explain what "parity" means in the contexts of different classes of options. Make sure that your explanation includes a reason for why parity relationships are useful for identifying arbitrage opportunities.

Question Determine which of the following statements about options is true. Possible Answers A Naked writing is the practice of buying options without taking an offsetting position in the underlying asset. B A covered call involves taking a long position in an asset together with a written call on the same asset. c An American style option can only be exercised during specified periods, but not for the entire life of the option. D A Bermudan style option allows the buyer the right to exercise at any time during the life of the option. An in-the-money option is one which would have a positive profit if exercised immediately. Question A call option will be exercised: Possible Answers A by the seller if the market price of the underlying asset is less than the strike price B by the buyer if the market price of the underlying asset is less than the strike price c by the seller if the market price of the underlying asset is greater than the strike price D by the buyer if the market price of the underlying asset is greater than the strike price E by either the buyer or seller depending on market conditions