You Own a Stock That Has Risen from $10 Per

question 49

Multiple Choice

You own a stock that has risen from $10 per share to $32 per share. You wish to delay taking the profit, but you are troubled about the short-run behavior of the stock market. An effective action on your part would be to

• A) purchase a put.
• B) purchase a call.
• C) purchase an index option.
• D) utilize a bearish spread.
• E) utilize a bullish spread.

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Definitions:

Google

A multinational technology company specializing in Internet-related services and products, including search engines, online advertising technologies, and software.

Monopolistic Market

A market structure characterized by a single seller who has exclusive control over a product or service, limiting competition.

Marginal Cost

The cost associated with the production of an additional unit of a good or service.

Internet Explorer

A discontinued web browser that was developed by Microsoft, once a dominant choice for internet access but replaced by newer technologies.