A Call Option Has an Exercise Price of $100

question 14

Multiple Choice

A call option has an exercise price of $100. At the final exercise date, the stock price could be either $50 or $150. Which investment would combine to give the same payoff as the
Stock?

• A) Lend PV of $50 and buy two calls
• B) Lend PV of $50 and sell two calls
• C) Borrow $50 and buy two calls
• D) Borrow $50 and sell two calls

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Definitions:

Drive to Defend

The intrinsic motivation individuals or groups have to protect their beliefs, values, or possessions from perceived threats.

Reactive

A mode of response or behavior characterized by actions taken in response to external events or situations rather than initiating change proactively.

Expectancy Theory

A motivational theory that suggests an individual's behavior is determined by their expected outcomes or rewards.

Desired Outcomes

The specific results or achievements that an individual or organization aims to attain through various actions or initiatives.