Mary Wrote a 40 Call on ABC Stock at a Price

question 105

Multiple Choice

Mary wrote a 40 call on ABC stock at a price of $275. She does not own any shares of ABC. Mary has
I. limited her losses to $275.
II. unlimited loss potential.
III. limited her gains to $275.
IV. unlimited profit potential.

• A) I and IV only
• B) II and III only
• C) I and III only
• D) II and IV only

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Definitions:

Alcohol

A psychoactive substance commonly found in beverages such as beer, wine, and spirits, known for its depressant effects on the central nervous system.

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The condition of being pregnant, involving the development of a fetus inside a woman's uterus.

Direction of Magnitude

The attribute of comparing two values or entities that indicates the relationship in terms of greater than, less than, or equal to.

Statistical Term

A term or concept used in the field of statistics to describe, analyze, and interpret data and its patterns.