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:

Neurotic Anxiety

A psychological condition characterized by excessive worry or fear without a clear source, often stemming from internal conflict.

Consciousness

The state of being aware of and able to think about one's own existence, sensations, thoughts, surroundings, and experiences.

Emotion-focused Strategy

This refers to stress management techniques that aim to reduce the emotional impact of a stressor by changing one's emotional reaction, rather than addressing the stressor directly.

Problem-focused Strategy

Coping mechanisms aimed directly at eliminating or reducing the source of stress through active problem solving.