USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 64

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
GE Corporation has a put option selling for $2.90 and a call option selling for $1.95, both with a strike price of $29.00.
-Refer to Exhibit 16.6. Which strategy is most appropriate for an investor who expects share prices to be volatile but was inclined to be bullish?

• A) protective put
• B) covered call
• C) long straddle
• D) short straddle
• E) long strap

---

Definitions:

Owner's Equity

The residual interest in the assets of the entity after subtracting liabilities, representing the owner's claim on the business assets.

Total Assets

The sum of all assets owned by a company, including cash, investments, property, and equipment.

Period Of Time

A specific duration or length of time during which an event occurs or a condition exists.

Expenses

Costs incurred in the operations of a business that are necessary for earning revenue.