The Leverage Strategy of Buying Call Options Is Based on the Idea

question 25

Multiple Choice

The leverage strategy of buying call options is based on the idea that

• A)A small change in the price of the underlying common stock can cause a large change in the price of the option
• B)Leverage reduces the risk of loss on the option contract
• C)Leverage reduces the risk of loss on the portfolio
• D)None of the above

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The act of predicting and preparing for potential future interactions with others.

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The act of accepting responsibility for a mistake or wrongdoing.