Quiz Ch 23 – T/F Put Options Value at Expiration
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
True or false: A put option will be worthless at expiration if the stock price is below the exercise price.
True or false: A put option will be worthless at expiration if the stock price is below the exercise price.
True or false: The option to abandon a real asset does NOT gain value as time to expiration increases, in contrast to call options.
True or false: The correlation between bond maturity and the value of a firm’s default right often exhibits a dynamic increase.
True or false: In most cases, promised yields maintain a level at least equal to anticipated yields.
True or false: The value of a risky bond is derived by subtracting the value of a put option on assets from the bond value without default.
True or false: The value of risky bonds is determined by subtracting the call option value from the asset value.
True or false: It’s highly unusual for a corporate bond to exceed a government bond in expected yields.
True or false: The VIX serves as an estimation of anticipated future market volatility.
True or false: Providing executives with warrants as compensation serves as an incentive for them to enhance the value of the company’s stock price.
True or false: Warrants have no expiration.