An Investor Purchases a Call Option and Its Underlying Stock

question 39

Multiple Choice

An investor purchases a call option and its underlying stock on the same day. If the stock appreciates by 25%, the call option will appreciate by ________.

• A) more than 25%
• B) less than 25%
• C) exactly 25%
• D) none of the above

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Definitions:

Subtle

Describing something so delicate or precise as to be difficult to analyze or describe; often implies complexity.

Spatial Reasoning

The ability to understand, reason, and remember the spatial relations among objects or space.

Replicable

Capable of being repeated or duplicated under similar conditions, a critical criterion for scientific research to verify results.

Double-blind Study

A research method in which neither the participants nor the researchers know who is receiving the experimental treatment, to prevent bias.