A Call Option Has an Exercise Price of $100

question 73

Multiple Choice

A call option has an exercise price of $100. At the exercise date, the stock price could be either $50 or $150. Which investment strategy provides the same payoff as the stock?

• A)Lend PV of $50 and buy two calls.
• B)Lend PV of $50 and sell two calls.
• C)Borrow $50 and buy two calls.
• D)Borrow $50 and sell two calls.

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Standard of Living

A level of wealth, comfort, material goods, and necessities available to a certain socioeconomic class or geographic area.

Taft-Hartley Act

The Taft-Hartley Act, passed in 1947, is a United States federal law that restricts the activities and power of labor unions.