If You Were to Purchase an October Option with an Exercise

question 65

Multiple Choice

If you were to purchase an October option with an exercise price of 50 for 8 and simultaneously sell an October option with an exercise price of 60 for 2,you would be

• A) Bullish and taking a high risk.
• B) Bullish and conservative.
• C) Bearish and taking a high risk.
• D) Bearish and conservative.
• E) Neutral.

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Definitions:

Economic Difference

The disparity in economic conditions, wealth, or resources between different groups or regions.

Compounded Monthly

The process where interest earned is added to the principal sum each month, which then earns further interest.

Inheritance

Assets or property received from someone who has passed away, often as dictated by a will or the laws of intestacy.

Investment

Assigning funds with the goal of achieving returns or making a profit.