Owning a Call Option That Has a High Probability of Being

question 6

Multiple Choice

Owning a call option that has a high probability of being exercised is said to be equivalent to owning the stock.In which way is owning a call not equivalent to owning the stock?

• A)Option holders pay no income taxes.
• B)Shareholders do not have capped (restricted) profits.
• C)Option holders do not receive dividends.
• D)Shareholders cannot sustain losses.

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Definitions:

Amplitude

The magnitude or extent of change in a variable or oscillation, often used in physics to denote the maximum displacement from equilibrium.

Dyspnea

A subjective experience of breathing discomfort that varies in intensity, commonly described as shortness of breath.

Diaphoresis

Excessive sweating, often as a symptom of a medical condition or result of medication.

Sibling History

Information about the health, diseases, or other medical conditions of an individual's brothers and sisters.