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NEW QUESTION: 1
[According to the PRMIA study guide for Exam 1, Simple Exotics and Convertible Bonds have been excluded from the syllabus. You may choose to ignore this question. It appears here solely because the Handbook continues to have these chapters.] Which of the following statements is true:
I. Knock-out options start lifeless and convert to a plain vanilla option when the barrier is hit II. Barrier options are cheaper than equivalent vanilla options III. Average price options are more expensive than equivalent vanilla options IV. Digital options have a high gamma close to the strike price
A. II and IV
B. I and III
C. I, II and IV
D. II, III and IV
Answer: A
Explanation:
Knock-out options start as plain vanilla options and are 'knocked-out', ie cease to exist, when the barrier is hit.
Knock-in options start lifeless and 'kick-in', ie come into play as plain vanilla options when the barrier is hit.
Therefore statement I is not correct.
Barrier options are certainly cheaper than equivalent vanilla options because vanilla options have a larger range of prices over which they pay out. Therefore statement II is correct.
Statement III is not correct. Average price options, also called Asian options, are less attractive to a buyer of options and therefore they are cheaper and not more expensive than vanilla options. This is because average prices are less volatile, and also when compared to a strip of equivalent vanilla options, some of the individual vanilla options in the strip may pay out whereas on the average nothing may pay out.
Digital options have a very high gamma close to the strike price as the option payout becomes uncertain and fluctuates sharply between 0 and 1. Therefore statement IV is correct.

NEW QUESTION: 2
Which HP MFP feature should you highlight to a customer who is concerned about document scan misfeeds?
A. Legal size scanning glass
B. HP Even/Page What is the customer value of the Universal Print Driver?
C. ColorLok Technology
D. Automatic Duplex scanning
Answer: D

NEW QUESTION: 3
The 1Py4 address of the host is 200_200_200_201/30_ Which host with the following IPv4 address and its communication do not need to be forwarded by the muter?
A. 200200200.1
B. 0
C. 1
D. 200200.200_202
Answer: D