A Stock Price Is Currently $23

question 15

Multiple Choice

A stock price is currently $23.A reverse (i.e short) butterfly spread is created from options with strike prices of $20,$25,and $30.Which of the following is true?

• A)The gain when the stock price is greater that $30 is less than the gain when the stock price is less than $20
• B)The gain when the stock price is greater that $30 is greater than the gain when the stock price is less than $20
• C)The gain when the stock price is greater that $30 is the same as the gain when the stock price is less than $20
• D)It is incorrect to assume that there is always a gain when the stock price is greater than $30 or less than $20

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Definitions:

Hang-gliding

A recreational activity or sport where a person flies a light, non-motorized aircraft which is launched by leaping from a height.

Responsible

Being accountable or answerable for something within one’s power, control, or management.

Title Search

The process of examining public records to verify the legal ownership of property and determine if there are any claims or liens against it.

Standard of Care

The level of carefulness and caution expected from someone who has a responsibility to act carefully.