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Q1. A call option sells for $4 on a $25 stock with a strike price of $30. Which of the following statements is least accurate?

a. At expiration, the buyer of the call will not make a profit unless the stock's price exceeds $30.

b. At expiration, the writer of the call will only experience a net loss if the price of the stock exceeds $34.

c. A covered call position at these prices has a maximum gain of $9 and the maximum loss of the stock price less the premium.

Q2. Which of the following is the riskiest single-option strategy

a. writing a put

b. writing a call

Q3. At expiration, the value of a call option must equal :

a. the larger of zero, or the stock's price less the strike price.

b. the stock price minus the strike price, or arbitrage will occur.

c. the larger of the strike price less the stock price or zero.

Q4. An investor buys a put on a stock selling for $60, with a strike price of $55 for a $5 remium. The maximum gain is..?

a. $55

b. $60

c. $50

Q5. A put with a strike price of $75 sells for $10. Which of the following statements is least accurate? The greatest...

a. profit the writer of the put option can make is $10.

b. loss the writer of the put option can have is $75.

c. profit the buyer of the put option can make is $65.