Eric Has an Option Position on Langdon Stock That Results

question 33

Multiple Choice

Eric has an option position on Langdon stock that results in a zero dollar payoff when the stock price is equal to or greater than the option strike price.What did he do to obtain this position?

• A)Purchased a call option
• B)Purchased a put option
• C)Wrote a call option
• D)Wrote a put option
• E)No option position would have this result.

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Definitions:

Extinction

In psychology, the diminishing of a conditioned response, typically when the conditioned stimulus is no longer paired with the unconditioned stimulus.

Repeated Pairings

A concept from behavioral psychology where repeated association of two stimuli results in the learning or conditioning of a response.

Prior Linking

The process of establishing a connection or association between concepts or items in memory before they are encountered again, facilitating recall or recognition.

Masked Branding

A marketing strategy where a brand deliberately conceals its direct association with a product or service to appeal to a different consumer segment or to test new markets.