A Synthetic Call Option on a Share Is Created By

question 18

Multiple Choice

A synthetic call option on a share is created by:

• A) buying two shares.
• B) buying the share and buying a put option on the share.
• C) selling the corresponding put option.
• D) selling the call option and buying the put option.

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Definitions:

Banking System

The network of institutions that accept deposits, offer loans, and provide a variety of financial services to their customers, including savings and checking accounts.

Paper Money

Currency in the form of paper notes, issued by the government or central bank, representing a claim on the issuing country's government.

Gold

A precious metal that is used as an investment, a hedge against inflation, and in various industrial and jewelry applications, known for its value retention over time.

U.S. Currency

The money that is legally in use in the United States, consisting mainly of Federal Reserve Notes (dollar bills).