DIRECTIONS: Here is the Unit #5 Weekly Quiz Question Sheet that you should submit to your Unit #5 Homework Assignment Folder.Please submit your Unit #5 Quiz Answer Sheet in MS Word format with the following file name: LastNameFirstInitial_Unit 05_QuizAnswerSheet.docx. For example, if you name is John Smith, the file name of your Answer Sheet should be SmithJ_Unit05_QuizAnswerSheet.docx.If you have any questions or comments, please do not hesitate to contact me.NAME: _____________________________________Question NumberQuestion1Which of the following is TRUE regarding the purchase of a call option?The yield on the purchaser’s portfolio would increase by purchasing the optionThe purchaser would limit the amount of money he could lose if the underlying stock declined.The purchaser would benefit if the underlying stock declined.The purchaser would exercise the option if the stock declined.2Which of the following is a FALSE statement about the point-of-view of the call option holder:In-the-money is when the underlying price is greater than the stock priceAt-the-money is when the underlying price is equal to the stock priceOut-of-the money is when underlying orice is greater than the stock priceAfter-the-money is when the premium is deducted from the underying stock price3Which of the following option strategies has the greatest amount of investor risk?Buying a long straddleWriting an uncovered putWriting an uncovered callBuying a long combination4How can you describe “derivative” markets?Something that cannot exist on its ownFinanical market instrumentsFinancial market indicesSpot finanical instruments5A writer of an uncovered call option would profit if theUnderlying common stock goes upUnderlying common stock goes downCall expiresI onlyII onlyI and III onlyII and III only6Derivatives “piggyback” on:The debt marketThe equity marketThe forex marketThe commodity marketI and III, II, and IIII, II, IVI, II, III and IV7List the advantages of the forward markets:Flexibiity with regard to delivery datesFlexibility with regard to size of contractQuality of the assetTransation costs are lockedI and III, II and IIII, II and IVI, II, III, and IV8Your client purchased 300 shares of Speedy Airlines common stock at $28 a share in July of 2015. In June of 2016 the client writes 2 October 35 calls at 5 against the stock position. If the market of Speedy Airliens is trading at $39 at expiration, what is the client’s realized gain?$1,000$1,700$2,400$4,3009Futures differ from options in all of the following ways EXCEPT:The future buyer has the obligation to buy the commodity at the specified price and at the spcified time.The option buyer has the obligation to buy the security at the specified price and at the specified time.Futures contracts require the delivery of an asset at the settlement date (or offsetting transaction); options may be exercised at any time up to the expiration date, or they may expire unexercised.Future contracts can be both on margin, while options cannot.10An investor, having just purchased 5 put contracts, may be anticipatinga.its underlying assets to rise in valueb.its underlying assets to decline in valuec.some of the contracts owned to be sold independently of each otherd. market interest rates to follow a decline in the contracts’ underlying value11John, a short seller is trying to determine his break-even point. With no other securities, John plans to short sell 100 shares of XYZ at $40. Next John plans to sell an XYZ October Put for $500. John will break-even when the price of the stock is at:$35$50$45$4012A Call is an Option to Buy:TrueFalse