You Are Cautiously Bullish on the Common Stock of the Wildwood

question 4

Multiple Choice

You are cautiously bullish on the common stock of the Wildwood Corporation over the next several months. The current price of the stock is $50 per share. You want to establish a bullish money spread to help limit the cost of your option position. You find the following option quotes:
-Ignoring commissions,the cost to establish the bull money spread with calls would be _______.

• A) $1,050
• B) $650
• C) $400
• D) $400 income rather than cost

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Definitions:

Stoicism

An ancient philosophy emphasizing rationality and self-control, teaching that virtue is sufficient for happiness and one should not be controlled by the desire for pleasure or fear of pain.

Ethical Egoism

A moral philosophy that posits individuals should act in their own self-interest because it is the moral thing to do.

Analysis

The process of examining components or structures of a subject to understand its nature or to determine its essential features and their relations.

Hedonism

A philosophy that argues pleasure or happiness is the highest good and ultimate aim in life.