An Investor Purchases a Call Option and Its Underlying Stock

question 48

Multiple Choice

An investor purchases a call option and its underlying stock on the same day.If the stock appreciates by 25%,the call option will appreciate by:

• A)more than 25%
• B)less than 25%
• C)exactly 25%
• D)0%
• E)less than 0%

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Definitions:

Extrinsic Factors

External elements or influences that affect behavior, motivation, or attitudes, and are not inherent to the individual.

Intrinsically Motivated

Driven by internal rewards or satisfaction, not external incentives or pressures.

Sense Of Self

Sense of self refers to an individual's perception, thoughts, and feelings about their identity, personality, and existence.

Mindfulness

The practice of being fully present and engaged in the moment, aware of one's thoughts and feelings without judgment.