Suppose XYZ Is Priced at $125 a Share,has a Call

question 81

Essay

Suppose XYZ is priced at $125 a share,has a call with an exercise price of $150,has two months to expiration,and costs $0.125 per contract. Why do you suppose investors would be willing to purchase a call that is so far out of the money?

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Definitions:

Strain

In physical science, strain refers to the deformation of materials in response to stress. In a broader context, it can also denote physical or mental pressure.

Venous Doppler

A diagnostic imaging technique used to observe the blood flow through veins, typically to identify clots or blockages.

Orthostatic Hypotension

A form of low blood pressure that happens when standing up from sitting or lying down, leading to dizziness or lightheadedness.

Activity Tolerance

An individual's ability to endure and perform physical activities without undue fatigue, often used in clinical settings to assess patient well-being.