It Is May 19^th and You Own a June,European Call

question 10

Multiple Choice

It is May 19^th and you own a June,European call on ABC Corp.with an exercise price of $50.The option trades at $40 and ABC is trading at $86.What should you do?

• A) Exercise the option now and take the profits.
• B) Buy more options on ABC Corp.
• C) Sell your ABC stock before its price declines.
• D) Sit and wait until the June expiration.

---

Definitions:

Night's Sleep

The period of rest during night time where the body and mind undergo restorative processes.

REM Sleep

A stage of sleep characterized by rapid eye movement, during which most vivid dreaming occurs, and is considered important for learning and memory processes.

Electroencephalograph

An instrument used to record the electrical activity of the brain.

Beta Waves

Beta waves are a pattern of brain electrical activity signifying an awake, alert, and focused state often associated with active concentration and thinking.