It Is May 19 and You Own a June European

question 87

Multiple Choice

It is May 19 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.

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Definitions:

Reformist Movements

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The organized pattern of social relationships and social institutions that together compose society, guiding and constraining individual and group behavior.

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Scholars who believe that different societies will gradually become more similar over time through the process of globalization and technological evolution.

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The location of Canada's federal legislature in Ottawa, known as the seat of the country's parliamentary democracy.