QUESTION 1 Brad purchased an option that he can only exercise on the final day of the option period. Which type of option did he purchase? Pointed American Inflexible Dated European QUESTION 2 VaR can be defined as the minimal loss of a financial position during a given time period for a given probability, True False QUESTION 3 Assume the standard deviation of the returns on XYZ stock increases. This change will the value of the call options and the value of the put options on XYZ stock increase decrease decrease; decrease increase; increase decrease increase not effect: not effect QUESTION 4 If the risk-free rate is 6.5 percent compounded annually, what is the continuously compounded risk-free rate equal to? 1/1n1.065 6.10% In 1.065 6.24% 1.065.1 QUESTIONS 3 Under European put-call parity, the present value of the strike price is equivalent to the present value of a U.S. Treasury bill with a face value equal to the strike price. True False