Which of the Following Is NOT True of Calls and Puts

question 54

Multiple Choice

Which of the following is NOT true of calls and puts?

• A) They are generally traded on organised exchanges.
• B) They can be used to hedge a gain or prevent a loss on a stock holding.
• C) They provide the buyer with an opportunity of greater profits than simply from buying and selling the underlying shares.
• D) They both result in new equity capital for the company.

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Definitions:

Contractual Notice

Formal communication, typically written, given by one party to another regarding terms or changes in a contractual agreement.

Implied Contract Terms

Terms judges read into employment contracts when the written contract does not expressly deal with the matter.

Employment Contracts

Written or implied agreements specifying the terms and conditions of an individual's employment.

Negligence

A failure to behave with the level of care that someone of ordinary prudence would have exercised under the same circumstances.