USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 113

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

-Refer to Exhibit 16.8. If you establish a long straddle using the options with a 90 exercise price, what is your dollar gain or loss if at expiration XYZ is still trading at 101 11/16?

• A) $68.75 loss
• B) $68.75 gain
• C) $37.50 loss
• D) $1,200.00 loss
• E) $1,200.00 gain

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Definitions:

Reasonable Grounds

A basis of sufficient facts and information indicating that a belief or action is more likely true or correct than not, often used in legal contexts.

Shipment Contract

A contract in which the seller is obligated to send the goods to the buyer but is not responsible for loss or damage to the goods once they have been shipped.

Destination Contract

A legal agreement specifying that the seller of goods will bear the risk and expense until the goods are delivered to a specific location.

Seller Obligations

Refers to the responsibilities and duties a seller must fulfill as part of a sales contract, including delivering the goods or services as agreed.