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A trader sells a put option with a strike price of $40. The premium received for the option is $3. If the stock price at expiration is $30, what is the net payoff?

Jules is participating in the Strange Situation experiment. When his mother returns, he freezes, and then behaves erratically. In fact, he runs away from his mother. What kind of attachment is this? 

Which of the following is bearish on price and bearish on volatility?

Harry Harlow studied attachment in monkeys. He found that when baby monkeys were separated from their mothers and offered a substitute, they preferred a                   .

Investors are convinced that, next year, the price of a stock will either go up or down; they disagree on the volatility of the price. The current spot price is $64.25 and volatility will either be high or low. If volatility is high, the price will either increase or decrease by $14.00. If volatility is low, the price will either increase or decrease by $3.00. If the increase or decrease in the price can occur with equal probability, how much more is an at-the-money put expected to (gross) payoff when volatility is high rather than low?

Given the following stock prices over six consecutive days: Day 1: $90 Day 2: $92 Day 3: $91 Day 4: $95 Day 5: $97 Day 6: $100 Calculate the population standard deviation of the log-returns of the stock prices. (Recall, option traders assume 252 daily in a year.)

A trader buys a call option with a strike price of $50. The premium paid for the option is $5. If the stock price at expiration is $45, what is the net payoff?

What is the difference between an call option’s call price and its strike price?

Given the following information, what is the net payoff of a synthetic long forward at expiration? Strike price of call and put: $120 Stock price at expiration: $125 Premium paid for call: $6 Premium received for put: $5 Recall, a synthetic long forward is a long position in a call and a short position in an otherwise identical put.

What do the upward slope and linearity of the payoff diagram indicate about an investor who has a long forward position?