A Call Option Has an Exercise Price of $150

question 48

Multiple Choice

A call option has an exercise price of $150. At the final exercise date, the stock price could be either $100 or $200. Which investment would combine to give the same payoff as the stock?

• A) Lend PV of $100 and buy two calls
• B) Lend PV of $100 and sell two calls
• C) Borrow $100 and buy two calls
• D) Borrow $100 and sell two calls

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Definitions:

Force-Field Analysis

A method developed by Kurt Lewin to analyze the factors that support or hinder a particular situation or change initiative.

New Direction

A change in strategy, goals, or objectives that leads an individual, team, or organization towards a different path or course of action.

Generic Change Model

A conceptual framework used to guide the process of implementing change in an organization, typically involving stages such as planning, execution, and review.

Critical Periods Of Change

Specific times during which an organization or individual is especially responsive to certain types of learning or change.