Reference no: EM13806715
TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false.
1. Treasury bond yields are commonly used as the basis for yield curves because they are low risk and homogeneous in nature.
2. The mutual fund, and not the investor, is responsible for all income taxes on capital gains and dividends earned by the fund.
3. Like ordinary stocks, exchange traded funds (ETFs) can be sold short.
4. An investment portfolio should be built around the needs of the individual investor.
5. Only capital gains that have been realized should be included in the measurement of a portfolio's return over a given period of time.
6. Over a period of time if an investment has not met its return objective, it should be sold.
7. Options are created by investors.
8. Puts and calls are issued by the same corporation that issued the underlying stock.
9. The owner of a put is obliged to sell the underlying security at the strike price on the date of expiration.
10. The party that accepts the legal obligation to stand behind the option is the buyer of the contract.
11. The buyer of a put expects the price of the underlying stock to rise.
12. A put option has a strike price of $32. The current price of the stock is $34. The put option is said to be "in-the-money."
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