MCQs of Corporate Finance

Finance → MCQs of Corporate Finance from 96 to 100

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96. If the co-variance between stock A and market returns is 12, and the standard deviation of market returns is 3 then what is the value of beta?
(A) 0.96
(B) 1.0
(C) 1.33
(D) 1.45

97. Difference between strike price and stock price is called
(A) intrinsic value
(B) option premium
(C) time premium
(D) none of these

98. Option value at expiration is a function of:
(I) interest rate
(II) volatility
(III) stock price
(IV) exercise price
(A) I only
(B) III only
(C) I and II
(D) III and IV

99. If market price of the share at expiration is $100 and exercise price is $80, then value of a call option at expiration is
(A) –$20
(B) $0
(C) $1
(D) $20

100. If market price of the share at expiration is $100 and exercise price is $80, then value of a put option at expiration is
(A) –$20
(B) $0
(C) $1
(D) $20

ANSWERS: MCQS OF CORPORATE FINANCE
96. (C) 1.33
97. (A) intrinsic value
98. (D) III and IV
99. (D) $20
100. (B) $0