USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 48

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

-Refer to Exhibit 16.1. If the spot rate at expiration is $0.90 and the call option was purchased, what is the dollar gain or loss?

• A) $0
• B) $3750 gain
• C) $3660 gain
• D) $4650 loss
• E) $2680 loss

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Definitions:

Informational Influence

Informational Influence occurs when individuals conform to the behaviors or attitudes of a group to obtain and accept accurate information or because they believe the group is competent.

Groupthink

A phenomenon that occurs within a group of people, where the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.

Deindividuation

A psychological state where an individual loses self-awareness and self-restraint, often in group settings, leading to uncharacteristic behavior.

Normative Influence

A type of social influence that leads individuals to conform in order to be accepted and liked by others.