If the Market Price of an Option Just Before Its

question 33

Multiple Choice

If the market price of an option just before its expiration is $33 while its strike price is $29, arbitrage will determine a price for it that:

• A)leaves an investor indifferent between buying the stock outright or buying an option and then exercising it.
• B)encourages the investor to buy the stock outright and sell it when the option expires.
• C)encourages the investor to buy an option and exercise it only after its expiration.
• D)encourages the investor to buy the stock outright and rewrite an option later.

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Definitions:

Distortions

Alterations or misrepresentations of perceptual or cognitive information, which can lead to inaccuracies in perception, memory, or thought.

Sensory And Perceptual Processes

The stages of receiving external stimulus through the senses and interpreting those signals to form a coherent understanding of the environment.

Hallucinogen

A substance that causes alterations in perception, mood, and cognitive processes, producing experiences that may differ drastically from reality.

Emmett Till

A fourteen-year-old African American boy whose brutal killing in Mississippi in 1955 became a pivotal moment in igniting the Civil Rights Movement.