If You Are Short a Call and Long an Otherwise

question 12

Multiple Choice

If you are short a call and long an otherwise identical put on the same stock,where the strike price is the forward price of the stock for the same maturity as the options,you essentially have the following position:

• A)A short forward on the stock for the maturity of the option.
• B)A synthetic collar.
• C)An options position for which you pay a positive net premium up front.
• D)An options position for which you receive a net premium up front.

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Definitions:

Proxy Solicitations

Efforts to collect proxy votes from shareholders to influence decisions at shareholder meetings.

Binding Vote

A vote that obligates the involved parties to adhere to the decision or outcome of that vote.

Mortgage

A legal agreement by which a bank or creditor lends money at interest in exchange for taking title of the debtor's property, with the condition that the conveyance of title becomes void upon the payment of the debt.

Pledge

A promise or agreement to do something or a tangible object given as a guarantee of the promisor's commitment.