1. What happens to the value of a call option if the time to expiration is increased?
2. All option pricing models are based on the concept of a riskless hedge. Describe what this means. 3. What is the difference between an exercise price and an exercise value?
4. When the exercise price exceeds the current stock price a put option is said to be _________.
5. Options sold without the stock to back them up are called__________ options.
6. If you exercise one call option contract, how many shares of stock will you get?