1 consider an exchange-traded call option contract to buy, Ask an Expert

Finance

1. Consider an exchange-traded call option contract to buy 500 shares with a strike price of $40 and maturity in four months. Explain how the terms of the option contract change when there is

A 10% stock dividend

A 10% cash dividend

A 4-for-1 stock split

2. The buyer of a put option contract:

a. Receives the option premium in exchange for an obligation to buy an underlying asset.

b. Pays an option premium in exchange for a right to buy an underlying asset during a specified period of time.

c. Pays the strike price at the time the option is purchased and in exchange receives the right to exercise the option at any time during the option period.

d. Pays an option premium in exchange for a right to sell an underlying asset during a specified period of time.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92742647

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