Eduardo Owns an Option That Gives Him the Right to Purchase

question 2

Multiple Choice

Eduardo owns an option that gives him the right to purchase shares of ABC stock at a price of $18 a share.Currently,the stock is selling for $21.60.He would like to profit on this stock but is not permitted to exercise his option for another 2 weeks.Contrary to other investors,he believes the stock price will decline significantly over the next 2 weeks.Given this situation,he should

• A)sell his option today.
• B)buy call options today that expire in 2 weeks.
• C)wait for 2 weeks and then immediately exercise his option.
• D)purchase shares of ABC today and then sell his option in 2 weeks.
• E)just forget about it because he cannot profit from this situation.

---

Definitions:

Melatonin Dysregulation

An imbalance in the production or timing of melatonin release, affecting sleep patterns and potentially contributing to sleep disorders.

Early Childhood Loss

The experience of losing a significant person, such as a parent or sibling, during one's early years, which can have profound psychological effects.

Predictor

An element or variable that can be used to forecast or anticipate the outcome of a future event.

Hippocrates

An ancient Greek physician, often referred to as the "Father of Medicine," who significantly contributed to the practice of medicine as a rational science.