Quiz Ch 16 – Exploiting Mispriced Puts with Arbitrage
Essentials of Investments
Bodie, Kane, and Marcus
12th Edition
How should you take advantage of undervalued puts through riskless arbitrage?
Quiz Ch 16 – Hedge Ratio in Correlated Option and Stock Returns
Essentials of Investments
Bodie, Kane, and Marcus
12th Edition
What does the hedge ratio equal in a two-state binomial option model with perfectly correlated options and stock returns?
Quiz Ch 16 – Implication of ‘Smirk’ in the Black-Scholes Option Model
Essentials of Investments
Bodie, Kane, and Marcus
12th Edition
How does the concept of “smirk” in the Black-Scholes option model impact different aspects of options pricing?
Quiz Ch 16 – T/F Capital Structure Modification through Dividend Payments
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
True or false: Firms employ dividend payments as a means to adjust their capital structure by exchanging equity for debt.
Quiz Ch 16 – T/F Healy and Palepu’s Findings on Dividend Cessation Impact
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
True or false: Healy and Palepu observed that, on average, the stock price of firms announcing a cessation of dividends declined by 9.5 percent.