Which statement best describes option price sensitivities? The value of a:
A. Call option increases as interest rates rise.
B. Put option decreases as interest rates decline.
C. Put option increases as volatility decreases.
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In general, which of the following institutions will most likely have a high need for liquidity and a short investment time horizon?
A. Banks
B. Defined benefit pension plans
C. Endowments
A company has announced that it is going to distribute a group of long-lived assets to its owners in a spin-off. The most appropriate way to account for the assets until the distribution occurs is to
A. Held for use until disposal with no deprecation taken.
B. Held for use until disposal with depreciation continuing to be taken.
C. Held for sale with no depreciation taken.
Bailey Watson, CFA, manages 25 emerging market pension funds. He recently had the opportunity to buy 100,000 shares in a publicly listed company whose prospects are considered "above industry nor
A. Reducing each pension funds allocation proportionately.
B. Distributing them equally among all the pension fund portfolios.
C. Allocating randomly but giving funds left out priority on the next similar type trade.
A trader seeking to sell a very large block of stock for her client will most likely execute the trade in a(n):
A. quote-driven market.
Brokered market.
C. order-driven market.