Exhibit 22.7 Use the Information Below for the Following Problem(S)

question 24

Multiple Choice

Exhibit 22.7
Use the Information Below for the Following Problem(S)
GE Corporation has a put option selling for $2.90 and a call option selling for $1.95, both with a strike price of $29.00.
-Refer to Exhibit 22.7.Which strategy is most appropriate for an investor who expects share prices to be volatile,but was inclined to be bullish?

• A) protective put
• B) covered call
• C) long straddle
• D) short straddle
• E) long strap

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Definitions:

Learning Style

An individual's preferred or most effective approach to acquiring new information or skills.

Right-Brain Dominant

A characteristic of individuals who are thought to have a brain function that favors creativity, emotion, and intuitive thinking — concepts that are part of the popular but scientifically disputed right-brain/left-brain theory.

Cornell System

A method of note-taking that involves dividing the paper into three sections: a narrow margin to the left for key ideas or questions, a larger right-hand space for notes, and a summary section at the bottom.

Mind Map

A visual diagram used to organize information hierarchically, showing relationships among pieces of the whole.