Jillian Owns a Call Option on WAN Stock with a Strike

question 26

Multiple Choice

Jillian owns a call option on WAN stock with a strike price of $20 a share.Currently,WAN is selling for $24.50 a share.Jillian would like to profit on this option but is not permitted to exercise the option for another two weeks.She believes the stock will decline in value before the two weeks is up.What should she do?

• A)Sell her option today
• B)Place an order to exercise her option on its expiration date
• C)Purchase an additional call option on WAN today with a strike price of $20
• D)Place an order to exercise her option as soon as she is permitted to do so
• E)Convert her American option into a European option

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Definitions:

Correlational Method

A research strategy that examines whether and how variables are related, without implying a cause-and-effect relationship.

Experimental Method

A research method that involves manipulating one variable to determine if changes in one variable cause changes in another variable.

Case Study

A detailed examination of a single subject (an individual or a small group), often used in clinical, social, or educational research to explore complex phenomena.

Dependent Variable

In experimental and observational studies, it is the outcome or factor that researchers aim to understand or predict based on changes in other variables.