You Own Both a May 20 Call and a May

question 45

Multiple Choice

You own both a May 20 call and a May 20 put. If the call finishes in the money, then the put will:

• A) Also finish in the money.
• B) Finish at the money.
• C) Finish out of the money.
• D) Either finish at the money or in the money.
• E) Either finish at the money or out of the money.

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Definitions:

Opportunity Cost

The cost of forgoing the next best alternative when making a decision or choosing to invest in one option over another.

Reducing Unemployment

The act of implementing policies or actions by governments or businesses to decrease the number of unemployed individuals in the economy.

Phillips Curve

An economic theory suggesting an inverse relationship between the rate of inflation and the rate of unemployment in an economy.

Unemployment Rate

The quantum of the working population that is job-free and in active search of employment.