1. When the market price is below the strike price, the call is said to be_______________. 2. If you do not exercise a call option, you will lose your_________________. 3. The total premium of an...

1. When the market price is below the strike price, the call is said to be_______________.

2. If you do not exercise a call option, you will lose your_________________.

3. The total premium of an option consists of the intrinsic value plus based____________________ on factors such as risk, variability, forecasted future prices, expiration date, leverage, and dividend.

4. The_______________ provides the relationship between call option value and the five factors that determine the premium of an option’s market value over its expiration value.

5. Future markets can be used for both___________ and______________.