The Vanna–Volga method to adjust for “exotic” versions of these things uses second-order sensitivities. A “smile” pattern that arises when plotting one “implied” value of these things deviates from an idealized model. (-5[1])Multiple of these things are combined in the “strip” and “straddle” strategies. Assuming Brownian motion and using Itô’s lemma gives an equation to model these things (-5[1])that won a Nobel Prize for Robert C. Merton. (-5[1])These things, which are said to be “in the money” (-5[1])if their intrinsic value is positive, (10[1])can be priced by the Black–Scholes formula. (10[3]-5[1])Unlike their American type, the European type (-5[1])of these derivatives can (10[1])only be exercised on their expiration date. (-5[1])For 10 points, what financial assets that grant the right to buy or sell a stock at a strike price include calls and puts? ■END■ (10[4]0[4])