What Is the Most an Investor Can Lose If Sells

question 26

Multiple Choice

What is the most an investor can lose if sells a call on the firm's stock with an exercise price of $100?

• A) $100
• B) $0
• C) $50
• D) Unlimited losses

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Definitions:

Paying Taxes

The mandatory financial charge or other levy imposed on an individual or a legal entity by a governmental organization in order to fund government spending and various public expenses.

Cash Outflow

The movement of money out of a business, resulting from expenses or investments.

Accounts Receivable

Outstanding amounts due from clients to a company for products sold or services utilized, awaiting payment.

Cash Collected

The total amount of money received by a company during a specific period.