Test bank fundamentals of futures and options markets 7e by hull chapter 9

Test Bank: Chapter Mechanics of Options Markets Consider an exchange traded put option to sell 100 shares for $20 Give (a) the strike price and (b) the number of shares that can be sold after (i) A for stock split (a) _ _ _ _ _ _ (b) _ _ _ _ _ _ (ii) A 25% stock dividend (a) _ _ _ _ _ _ (b) _ _ _ _ _ _ (iii) A $5 cash dividend (a) _ _ _ _ _ _ (b) _ _ _ _ _ _ A trader writes two naked put option contracts The option price is $3, the strike price is $ 40 and the stock price is $42 What is the initial margin? _ _ _ _ _ _ Which of the following lead to IBM issuing more shares (circle three) (a) Some executive stock options are exercised (b) Some exchange-traded put options are exercised (c) Some exchange-traded call options are exercised (d) Some warrants on IBM are exercised (e) Some of IBM’s convertible debt is converted to equity