USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 59

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

-Refer to Exhibit 16.8. If you establish a long strip using the options with a 95 exercise price, what is your dollar gain or loss if at expiration XYZ is still trading at 101 11/16?

• A) $256.25 loss
• B) $256.25 gain
• C) $925.00 loss
• D) $668.75 gain
• E) $668.75 loss

---

Definitions:

Real Incomes

Real incomes refer to the amount of goods and services that can be purchased with a given amount of money, after adjusting for inflation.

Tax Revenues

The money acquired by governments via tax collection.

Debt Financing

A method of funding in which a company borrows money to be repaid, typically with interest, at a later date.

Elected Political Officials

Individuals who have been chosen through a democratic process to hold public office and represent the interests of their constituents.