The price of Microsoft is $25 per share and that of Apple is $50 per share. The price of Microsoft increases to $36 per share after one year and to $41 after two years
Also, shares of Apple increase to $56 after one year and to $66 after two years. If your portfolio comprises 100 shares of each security, what is your portfolio return over year 1 and year 2? Assume no dividends are paid.
A) 21.53%, 14.67%
B) 22.67%, 16.30%
C) 24.93%, 18.75%
D) 22.21%, 18.26%
Answer: B
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The time value of money can be applied to all of the following except
A) bond valuation. B) stock valuation. C) determining the current market value of your home. D) determining the amount of taxes owed on income this year.
In the Black-Scholes option pricing model, an increase in exercise price (X) will cause
a. An increase in call value and an increase in put value b. An increase in call value and a decrease in put value c. A decrease in call value and an increase in put value d. A decrease in call value and a decrease in put value e. An increase in call value and an increase or decrease in put value