You Believe the Price of an Asset Is Going to Increase

question 33

Multiple Choice

You believe the price of an asset is going to increase within the next three months. Which one of the following payoff profiles for an option on that asset will reflect a profit if your belief is correct?

• A) Buying a put
• B) Selling a call
• C) Buying a call
• D) Selling a put
• E) Selling both a call and a put

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Definitions:

Moral Development

The process through which individuals develop proper attitudes and behaviors towards other people in society, based on social and cultural norms, laws, and personal beliefs.

Postconventional Level

A stage in Kohlberg's theory of moral development in which individuals make ethical decisions based on universal principles of justice that transcend their own personal or cultural preferences.

Abstract Principles

Fundamental ideas or concepts that are not tied to specific, tangible instances but apply broadly across different situations.

Preoperational Stage

A stage in Piaget’s theory of cognitive development (ages 2-7) where children begin to engage in symbolic play but don't yet comprehend concrete logic.