1. You purchase one July 120 call on MBI stock for a premium of $5.00 when the price of MBI stock is $122.50. Your call option is

a) In the money

b) At the money

c) Out of the money

d) Worthless

e) Priceless

2. You purchase one July 120 call on MBI stock for a premium of $1.20 when the stock is priced at $122.50. Your maximum loss on this position equals:

a) $120

b) $122.50

c) $100

d) $250

e) unlimited

3. You purchase one September 120 put on MBI stock for a premium of $1.50 when the price of MBI stock is $122.50. You hold the option until the expiration day, and then MBA stock is selling for your profit/loss equals:

a) -$150

b) -$50

c) 0

d) +$50

e) +$150

4. ExxonMobil earned $10.80 in EPS last year. ExxonMobil has recently adopted a long term target to pay out 55% of all future earnings as dividends. ExxonMobil’s dividends and earnings are expected to grow at a constant rate of 4% in the future. You require an 8% rate of return on stock investments of similar risk. What is your estimate of the market value of ExxonMobil stock? Closest to:

a) $121

b) $148

c) $154

d) $176

e) $270

5. if you want to measure the performance of your investment in a fund, including the timing of your purchases and redemptions, you should calculate the ___________.

A) Geometric average return

B) Dollar-weighted return

C) Time weighted return

D) Standard deviation of returns

E) Correlation of the returns