The Buyer of a Long Call Option

question 75

Multiple Choice

The buyer of a long call option:

• A) has a maximum loss equal to the premium paid.
• B) has a gain equal to but opposite in sign to the writer of the option.
• C) has an unlimited maximum gain potential.
• D) all of the above

Explain the concept of communication flow in organizations, including its directions, benefits, and disadvantages.

Understand the significance of active listening in effective communication.

Understand the components and calculation of return on investment.

Identify the advantages and judgmental factors involved with financial ratios.

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Definitions:

Discount

To calculate the present value of some future amount.

Future

A standardized legal contract to buy or sell a particular commodity or financial instrument at a predetermined price at a specified time in the future.

Forward Market

A marketplace for financial contracts that are agreed upon now but settled at a future date.

Premium

An amount paid in addition to a standard price, or the amount above the nominal or face value of a financial instrument.