You Are Considering Two Option Contracts with the Same Strike

question 17

Multiple Choice

You are considering two option contracts with the same strike price. Ignoring costs, which one of the following combinations will increase the value of a firm if prices move either up or down?

• A) Buying both a call and a put.
• B) Both buying and selling a call.
• C) Buying a call and selling a put.
• D) Buying a put and selling a call.
• E) Both selling a put and a call.

Understand the principles of effective communication in responding to routine requests and customer service issues.

Gain skills in crafting appropriate and professional email messages in a business context.

Learn the structure and key elements of form messages and their application in routine business communication.

Comprehend the guidelines for writing appreciation and credit extension messages.

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Definitions:

Common Stock

A type of equity security that represents ownership in a corporation, giving holders voting rights and a share in the company's profits via dividends.

Market Price

The ongoing market value at which one can buy or sell an asset or service.

Times Interest Earned

A financial ratio that measures a company's ability to meet its interest payments based on current earnings.

Balance Sheet

A financial statement that provides a snapshot of a company's financial position at a specific point in time, detailing assets, liabilities, and shareholders' equity.