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:

Imported Wine

Wine brought into a country from another country for sale and consumption.

Quantity Imported

The total number of goods or services brought into a country from abroad for sale.

Import Quotas

Restrictions set by the government on the amount or monetary value of products allowed to be imported into a nation.

Tariffs

Taxes imposed by a government on imported goods, often used to protect domestic industries and to generate revenue.