Mark Owns Both a March $20 Put and a March

question 10

Multiple Choice

Mark owns both a March $20 put and a March $20 call on Alpha stock. Which one of the following statements correctly relates to Mark's position? Ignore taxes and transaction costs.

• A) A price decrease in Alpha stock will increase the value of Mark's call option.
• B) A March $30 call is worth more than Mark's $20 call.
• C) The time premium on an April $20 put is less than the time premium on Mark's put. (Assume both puts expire in the same calendar year.)
• D) A price increase in Alpha stock from $26 to $28 will increase the value of Mark's put.
• E) If the intrinsic value of Mark's put increases by $1 then the intrinsic value of his call must either decrease by $1 or equal zero.

Appreciate the importance of adaptive behavior in defining and understanding intelligence and intellectual disability.

Understand the concept of intelligence quotient (IQ) and its distribution in the population.

Grasp the importance of reliability, standardization, and validity in psychological testing.

Know the criteria and implications of different IQ score ranges.

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Definitions:

Market Price

The current price at which an asset or service can be bought or sold in a particular market.

Price Discrimination

A pricing strategy where the same product or service is sold at different prices to different customers, based on factors like demand, market conditions, or purchasing power.

Segments

Different parts or sections of a market, divided based on characteristics like demographics, needs, or preferences.

Profit-maximizing

The process or strategy of adjusting production and sales in order to achieve the highest possible profit from operations, considering both revenues and costs.