You Are Considering Two Option Contracts with the Same Strike

question 255

Multiple Choice

You are considering two option contracts with the same strike price. Ignoring costs, which one of the following combinations will increase the value of a firm if prices move either up or down?

• A) Buying both a call and a put.
• B) Both buying and selling a call.
• C) Buying a call and selling a put.
• D) Buying a put and selling a call.
• E) Both selling a put and a call.

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Definitions:

Personality

Refers to the individual differences in characteristic patterns of thinking, feeling, and behaving.

Emotions

Complex psychological states that involve three distinct components: subjective experience, physiological response, and behavioral or expressive response.

Moods

Enduring affective states that do not have an identified cause, influencing an individual's emotional state over a period.

Emotions

Multifaceted mental states that encompass a trio of components: an individual's inner experience, a physical reaction, and a response that is either behavioral or expressive in nature.