USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 36

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

-Refer to Exhibit 16.8. If you establish a long strap 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) $37.50 loss
• B) $37.50 gain
• C) $100.00 loss
• D) $100.00 gain
• E) $2,437.50 loss

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Definitions:

Rank Ordering

The process of arranging items or individuals in a sequence based on their relative importance or value.

Recency Bias

is the tendency to weigh recent events more heavily than older ones when making decisions or evaluations.

Individual's Performance

The level of productivity and efficiency demonstrated by an individual in executing their tasks or responsibilities.

Latest Behaviours

The most recent patterns of action or conduct observed within individuals or groups.