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BMGT444 Final Exam 2025 Questions and Answers Which of the following is NOT true? - ....ANSWER ...-The holder of a call or put option must exercise the right to sell or buy an asset. When an exchange-traded call option on IBM stock is exercised, IBM issues more stock. Which of the following must post margin? - ....ANSWER ...-The seller of an option An action that reduces the risks involved in owning an asset or commodity by making a counteracting sale of that asset is called: - ....ANSWER ...-Hedging Which of the following describes how American options can be valued using a binomial tree? - ....ANSWER ...-Check whether early exercise is optimal at all nodes where the option is in-the-money What was the original Black-Scholes-Merton model designed to value? ....ANSWER ...-A European option on a stock providing no dividends Which of the following is true when dividends are expected? - ....ANSWER ...-The Black-Scholes-Merton model can be adjusted by subtracting the present value of expected dividends from the stock price …FOR STUDENTS ONLY…©️2025 ALL RIGHTS RESERVED… 1