The result that a protective put can be perfectly replicated by owning a U.S. T-bill and a call option is the _______.

		A. put-call parity relation
		B. covered call
		C. protective put
		D. straddle
		E. strangle

1. A protective put strategy for stock ownership is analogous to:

   		A. An insurance policy purchased on your car.
   		B. A lottery ticket.
   		C. A box strategy on the horses that will win, place, and show at the horsetrack.
   		D. A straddle strategy for bond ownership.
   		E. Inviting all your friends to your birthday party, with the hope that at least some of them will actually show up.

1. Stock ownership can be replicated by:

   		A. Buying call options on a stock and writing put options on a stock.
   		B. Buying call options on a stock and borrowing at the risk-free interest rate.
   		C. Buying put options on a stock and borrowing at the risk-free interest rate.
   		D. Buying put options on a stock, lending funds at the risk-free interest rate, and writing call options.
   		E. Buying call options on a stock, lending funds at the risk-free interest rate, and writing put options.

The buyer of an. _______ has the right, but not the obligation, to sell an asset on or before a specified date for a specified price.

		A. American call option
		B. American put option
		C. European call option
		D. European put option
		E. protective put

Which of the following terms appears in the Black-Scholes call option pricing formula?

		I Stock price volatility
		II Risk-free interest rate
		III Put option value
		IV Market value of debt
		V Exercise price
		A. II only
		B. III and IV only
		C. I and V only
		D. I, II and V only
		E. II, III and IV only