You Know for Certain That a Common Share of Mystical

question 14

Multiple Choice

You know for certain that a common share of Mystical Inc., worth $25 today, will be worth $55 one month from now. The stock pays no dividends. Which of the following actions would maximize your return on investment (assuming no transaction costs) ?

• A) Purchase a call option with a strike price of $55.
• B) Purchase warrants on the stock (totaling 100 shares) with a strike price of $35.
• C) Purchase a put option on the stock with a strike price of $30.
• D) Purchase 100 shares of the stock at the current price of $25 per share.
• E) Purchase a call option on the stock with a strike price of $25.

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Definitions:

Agent

An individual or entity authorized to act on behalf of another person or organization in legal or business matters.

Social Anxiety

The fear of social situations that involve interaction with other people, mainly stemming from the worry of being judged or evaluated negatively by others.

Interviewer Pauses

Deliberate moments of silence by an interviewer during a conversation, used to encourage the interviewee to continue speaking or provide more detailed responses.

Silence Interpretation

How individuals perceive and understand the absence of verbal communication, which can vary across contexts and cultures.