投资学第7版Test-Bank答案21.doc

投资学第7版Test-Bank答案21 投资学第7版Test-Bank答案21 PAGE PAGE 555 投资学第7版Test-Bank答案21 Multiple Choice Questions 1. Before expiration, the time value of an in the money call option is always A) equal to zero. B) positive. C) negative. D) equal to the stock price minus the exercise price. E) none of the above. Answer: B Difficulty: Easy Rationale: The difference between the actual option price and the intrinsic value is called the time value of the option. 2. Before expiration, the time value of an in the money put option is always A) equal to zero. B) negative. C) positive. D) equal to the stock price minus the exercise price. E) none of the above. Answer: C Difficulty: Easy Rationale: The difference between the actual option price and the intrinsic value is called the time value of the option. 3. Before expiration, the time value of an at the money call option is always A) positive. B) equal to zero. C) negative. D) equal to the stock price minus the exercise price. E) none of the above. Answer: A Difficulty: Easy Rationale: The difference between the actual option price and the intrinsic value is called the time value of the option.  4. Before expiration, the time value of an at the money put option is always A) equal to zero. B) equal to the stock price minus the exercise price. C) negative. D) positive. E) none of the above. Answer: D Difficulty: Easy Rationale: The difference between the actual option price and the intrinsic value is called the time value of the option. 5. A call option has an intrinsic value of zero if the option is A) at the money. B) out of the money. C) in the money. D) A and C. E) A and B. Answer: E Difficulty: Easy Rationale: Intrinsic value can never be negative; thus it is set equal to zero for out of the money and at the money options. 6. A put option has an intrinsic value of zero if the option is A) at the money. B) out of the money. C) in the m