If You Were to Purchase an October Option with an Exercise

question 95

Multiple Choice

If you were to purchase an October option with an exercise price of 50 for $8 and simultaneously sell an October option with an exercise price of 60 for $2, you would be

• A) bullish and taking a high risk.
• B) bullish and conservative.
• C) bearish and taking a high risk.
• D) bearish and conservative.
• E) neutral.

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Definitions:

Philosophy

The study of the fundamental nature of knowledge, reality, and existence, especially considered as an academic discipline.

Happiness

A state of well-being and contentment, characterized by positive emotions and feelings of joy and satisfaction with one’s life.

Pleasure

Pleasure is a state of satisfaction or joy, often experienced as a result of fulfilling desires or engaging in enjoyable activities.

Psychological Egoism

The theory that suggests human beings are motivated solely by self-interest, even in what seem to be acts of altruism.