Owning a Call Option That Has a High Probability of Being

question 1

Multiple Choice

Owning a call option that has a high probability of being exercised is said to be almost equivalent to owning the stock. In which way is owning a call not equivalent to owning the stock?

• A) Option holders pay no income taxes.
• B) Stockholders do not have capped (restricted) profits.
• C) Option holders do not receive dividends.
• D)Stockholders cannot sustain losses.

---

Definitions:

Limited-Service

Refers to businesses or providers that offer a reduced scope of services to their clients, often to maintain lower costs or focus on a niche market.

Specialty Merchandise

Products that are unique, high-quality, or branded, often requiring consumers to make a special effort to purchase them due to their distinct characteristics.

Product Lines

A group of related products under a single brand that are offered by a company to its target market.

Extensive Assortment

A wide variety and choice of products offered by a retailer, aimed at catering to diverse consumer needs and tastes.