1. Which of the following statements regarding Derivatives is true?
I) Selling a call option gives someone else the right to buy an asset from you at a fixed price.
II) Buying a put option gives you the right to sell an asset for a fixed price.
III) Buying a call option gives you the right to buy an asset for a fixed price.
IV) None of the above
2. You own a convertible bond with a face value of $1,000 and a market value of $1,034. The bond can be converted into 32 shares of stock. What is the conversion price?
$31.25
$34.63
$31.43
$32.31
$34.33