You Own a Stock That Has Risen from $10 Per

question 75

Multiple Choice

You own a stock that has risen from $10 per share to $32 per share.You wish to delay taking the profit but you are troubled about the short run behavior of the stock market.An effective action on your part would be to

• A) Buy a put option on the stock.
• B) Write a call option on the stock.
• C) Purchase an index option.
• D) Utilize a bearish spread.
• E) Utilize a bullish spread.

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Definitions:

Molding

The process of shaping a material by introducing it into a rigid frame called a mold.

Customizing

The process of modifying products or services to meet specific customer demands or preferences.

Manufacturing Cost

The total expense incurred in the production of goods, including raw materials, labor, and overhead.

Predetermined Overhead Rates

Estimated overhead rates used to assign manufacturing overhead costs to products based on a pre-defined basis such as machine hours or labor hours.