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:

Modeling

A psychological phenomenon where individuals learn and imitate behaviors by observing others, especially influential or authoritative figures.

Repetition

The act of repeating something that has already been said or written.

Associative Learning

A type of learning process in which a connection is made between two stimuli or between a behavior and a response.

Operant Behavior

Behavior that is controlled by its consequences, including rewards and punishments.