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1. If a bond has a longer time to maturity, then it should be more expensive, everything else being equal. True or false? 2. If the Federal Reserve reduces the country's interest rate, the bond market shall experience a price decline. True or false? 3. A call option with a lower strike price should have a lower premium. True or False? 4. A put option gives the holder the right to sell an asset at a specified strike price. True or False? 5. A put option writer could have the obligation to buy assets in certain situations. True or False? 6. If interest rate goes up, then the high coupon bond should have less price increase than zero coupon bond. True or False? 7. If interest rate goes down, then short-term bond should have more price increase than long-term bond. True or False? 8. A call option holder could have the obligation to buy assets in certain situations. True or False? 9. An option with longer time till maturity should have a higher premium. True or False? 10. Imagine yourself as a day-trader (speculator) and you believe the oil price will be much higher than the market expectation. What can you do to earn profit? Select all that apply. a. Long futures b. Short futures c. Buy call options d. Buy put options e. Write call options f. Write put options

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