A Stock Is Selling at $85 at the Expiration of an Option

question 35

Multiple Choice

A stock is selling at $85 at the expiration of an option contract.Which of the following options will most likely be exercised?

• A)Buyer of a call option with exercise price of $65.
• B)Buyer of a put option with exercise price of $65.
• C)Buyer of a call option with exercise price of $80.
• D)Buyer of a put option with exercise price of $85.

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Definitions:

Natural Stain

A discoloration or marking often found on materials, caused by the chemical or physical reaction of a natural substance.

Fractures

Breaks or cracks in rocks where there has been no significant movement or displacement of the sides relative to one another.

Slope-forming Unit

A layer of rock or sediment that determines the slope or steepness of a geological formation due to differences in strength, erosion, or weathering rates.

Loose

Describes materials or objects that are not tightly fixed or compact, allowing for easy movement or separation.