You Purchase a Stock at $70 and Simultaneously Write a Call

question 18

Multiple Choice

You purchase a stock at $70 and simultaneously write a call with a $70 strike price. If the call premium is $4.32, what is your profit per share if the stock price at expiration is $73.64?

• A) $4.32
• B) $3.64
• C) $7.96
• D) $0.68
• E) -$3.64

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Definitions:

Systematic Desensitization

A behavior therapy that is based on classical conditioning and used to treat fears by training clients in deep muscle relaxation and then having them confront a graduated series of anxiety-producing situations (real or imagined) until they can remain relaxed while confronting even the most feared situation.

Empathy

The ability to understand and share the feelings of another, mentally placing oneself in another's situation.

Person-Centered Therapist

A type of psychotherapist who follows the principles of person-centered therapy, focusing on providing a supportive environment that encourages self-discovery and self-acceptance.

Unconditional Positive Regard

A therapeutic concept developed by Carl Rogers, where the therapist accepts and supports the client regardless of what the client says or does.