You Find the Option Prices for Three June Call Options

question 79

Multiple Choice

You find the option prices for three June call options on the same stock.The 95 call has an implied volatility of 25%,the 100 call has an implied volatility of 25% and the 105 call has an implied volatility of 30%.If you believe this represents a mis-pricing situation you may wish to ____________________________.

• A) buy the 105 call and write the 100 call
• B) buy the 105 call and write the 95 call
• C) buy either the 95 or the 100 call write the 105 call
• D) write the 105 call and write either the 95 or the 100 call

Comprehend the impact of agency in personal decision-making within the context of broader social influences.

Identify the benefits of interdisciplinarity in sociological research.

Acknowledge the role of sociology in analyzing and addressing social problems.

Understand the correlation between alcohol consumption and academic performance among college students.

---

Definitions:

Fixed Exchange-Rate

A regime under which the government or central bank ties the official exchange rate to another country's currency or the price of gold.

Capital Account

A national account that shows the net change in asset ownership for a country. It includes foreign investments and loans.

Financial Account

A component of the balance of payments that records transactions of financial assets between residents of one country and the rest of the world.

Exchange Rate

The price of one currency in terms of another, allowing for the conversion of monetary values between countries.