A Speculator Can Choose Between Buying 100 Shares of a Stock

question 12

Multiple Choice

A speculator can choose between buying 100 shares of a stock for $40 per share and buying 1000 European call options on the stock with a strike price of $45 for $4 per option.For second alternative to give a better outcome at the option maturity,the stock price must be above

• A) $45
• B) $46
• C) $55
• D) $50

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Definitions:

Automatic Evaluations

Assessments or judgments made without conscious thought, often based on learned associations.

Stimuli

External events or occurrences that evoke responses or reactions.

Unconscious Evaluations

Assessments or judgments made without conscious awareness, often influencing preferences, decisions, and behaviors based on implicit biases.

Mere Exposure Effect

The tendency for people to come to like things simply because they see or encounter them repeatedly.