金融英语第十四章答案

Chapter 14

I . Answer the following questions in English.

use options?

Answer: There are two main reasons why an investor would

use options: to speculate and to hedge.

2. What are options?

Answer: An option is a contract that gives the buyer the right,

but not the obligation, to buy or sell an underlying asset at a

specific price on or before a certain date.

3. How many types of options?

Answer:The two types of options are calls and puts.

is a call option?

Answer:A call gives the holder the right to buy an asset at a

certain price within a specific period of time. Calls are similar

to having a long position on a stock. Buyers of calls hope that

the stock will increase substantially before the option expires.

5. What is a put option?

Answer:A put gives the holder the right to sell an asset at a

certain price

within

a

specific

period

of

time.

Puts

are

very

similar to having a short position on a stock. Buyers of puts

hope

that

the

price

of

the

stock

will

fall

before

the

option

expires.

6. What is the function of stock option?

Answer:As a way to attract and to keep talented employees,

especially management.

7. What is an option's premium?

Answer:When you buy an option, the purchase price is called

the

premium

.

If

you

sell,

the

premium

is

the

amount

you

receive. The premium isn't fixed and changes constantly - so

the premium you pay today is likely to be higher or lower than

the

premium

yesterday

or

tomorrow.

What

those

changing

prices reflect is

the

give

and

take

between

what

buyers

are

willing to pay

and

what

sellers

are

willing

to

accept

for

the

option.

The

point

at

which

there's

agreement

becomes

the

price for that transaction, and then the process begins again.

8. What is advantage of options?

Answer:The advantage of options is that you aren't limited to

making a profit only when the market goes up.

II.

Fill in

the each

blank with

an appropriate word

or

expression.

option is

a

contract

between a buyer

and

a seller

that

gives the buyer the right -- but not the obligation -- to buy or

to sell a

particular asset (the

underlying

asset) at a later

day at an agreed price.

2.A call gives

the

holder

the

right

to

b

uy

an asset

at a

certain price within a specific period of time. Calls are similar

to having a long position on a stock. Buyers of calls hope that

the

stock

will

increase

substantially

before

the

option

expires.

3.A put gives the holder the right to

sell

an asset at a certain

price within a specific period of time. Puts are very similar to

having a short position on a stock. Buyers of puts hope that

the price of the stock will

fall

before the option expires.

4.

People who

buy

options are called holders and those who

sell

options are called

writers;

furthermore,

buyers are said to

have

long

positions,and

sellers

are

said

to

have

short

positions.

5. Many companies use stock options

as

a way to attract and

to

keep

talented employees, especially management.

6. Intrinsic value is the amount in-the-money, which, for a call

option, means

that

the

price

of

the

stock

equals

the

strike

price.

Time

value

represents

the

possibility

of

the

option