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:

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Describes resources that are available in abundance and not limited in supply, in contrast to scarce resources which are limited and can be exhausted.

Leisure Activities

Leisure activities encompass non-obligatory, enjoyable actions engaged in during free time, such as hobbies, sports, and entertainment.

Compact Discs

Optical discs used to store music, videos, or data, once a predominant format for digital audio recording and playback.

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Containers typically made of woven strands of material used for storing or carrying items; metaphorically, it refers to groups or collections of items.