Circular File Stock Is Selling for $25 a Share

question 13

Essay

Circular File stock is selling for $25 a share.You see that call options on the stock with exercise price of $20 are selling at $3.What should you do? What will happen to the option price as investors identify this opportunity? Then you observe that put options on Circular File with exercise price $30 are selling for $4.What should you do?

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Definitions:

Rejection Sensitivity

Tendency to be hypervigilant and overreactive to signs of rejection from others.

Age-based Variation

Differences in behavior, physiology, or conditions that are primarily attributed to an individual's age.

Risk for Depression

The susceptibility or likelihood of developing depression, often influenced by genetic, environmental, and psychological factors.

Gender Differences

Variations in characteristics, behaviors, or attitudes that differ between males and females due to biological, social, or cultural factors.