The Buyer of a Long Call Option

question 75

Multiple Choice

The buyer of a long call option:

• A) has a maximum loss equal to the premium paid.
• B) has a gain equal to but opposite in sign to the writer of the option.
• C) has an unlimited maximum gain potential.
• D) all of the above

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Definitions:

Short-Run Aggregate Supply

Represents the total output of goods and services produced in an economy at different price levels over a short period, during which some factors of production are fixed.

Short-Run Aggregate Supply

The total supply of goods and services that firms in an economy plan on selling during a short time period, at different possible price levels.

Money Supply

The money supply refers to the total amount of monetary assets available in an economy at a specific time, including cash, coins, and balances held in checking and savings accounts.

Natural Rate

Natural Rate often refers to the natural rate of unemployment, which is the level of unemployment consistent with sustainable economic growth, where inflation is stable.