For a Call and a Put Written on the Same

question 10

Multiple Choice

For a call and a put written on the same underlying but at at possibly different strike prices,

• A)Both call and put options may be in-the-money at the same time.
• B)If the call is in-the-money,then the put will be out-of-the-money.
• C)If one of the options is out-of-the-money,then the other one is guaranteed to be in-the-money.
• D)At least one option will be in-the-money.

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Definitions:

Good Faith

Acting with honest intentions without seeking to take unfair advantage of another.

Intentional Torts

Intentional torts are wrongful acts done on purpose to harm another person, as opposed to accidentally, and can lead to civil liability.

Partnership

A legal form of business operation between two or more individuals who share management and profits. The specific terms are detailed in a partnership agreement.

Silent Partners

Investors in a partnership who contribute financially but do not participate in management or day-to-day operations of the business.