Which of the Following Statements Best Reflects the Following Profit

question 25

Multiple Choice

Which of the following statements best reflects the following profit profile of an option contract?

• A) The profile depicts the short call position of the option seller.
• B) The profile depicts the long call position of the buyer of the option.
• C) The profile depicts the short put position of the option seller.
• D) The profile depicts the long put position of the buyer of the option.

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Definitions:

Net Income

The total profit of a company after all expenses, including taxes and interest, have been deducted from total revenue.

Equity

The residual interest in the assets of a business after deducting its liabilities, representing the ownership interest of shareholders.

Assets

Resources owned by a business or individual that have economic value and can be used to meet debts or commitments.

Liabilities

Financial obligations or debts a company owes to external parties.