Fred Bought 600 Shares of Edgewood Shares at a Price

question 19

Multiple Choice

Fred bought 600 shares of Edgewood shares at a price of $19. The shares are currently selling for $53 a share. To protect his profits, Fred should buy

• A) 6 put options with a strike price of $50.
• B) 6 call options with a strike price of $55.
• C) 600 call options with a strike price of $55.
• D) 600 put options with a strike price of $50.

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Definitions:

Anxiety-buffer Conception

A theory suggesting that certain psychological constructs help individuals manage and lessen their anxiety about mortality and life's uncertainties.

Risky Feats

Actions that involve significant risk of harm or failure, often undertaken for the thrill or to achieve a particular accomplishment.

Basking Reflected Glory

The phenomenon where individuals associate themselves with the successes of others, often to enhance their own self-esteem.

Anxiety-buffer

Psychological mechanisms or processes that help individuals cope with and reduce anxiety, often by reinforcing self-esteem or providing social support.