Exhibit 13-8
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)

question 34

Multiple Choice

Exhibit 13-8
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) $\begin{array}{c}\quad\quad\quad\quad\text { XYZ CORP }\\\begin{array}{cccc}\hline &{ \quad\quad\quad\text { EXERCISE } } & & { \quad\quad\quad\text { NYSE } } \\\hline&\text { DATE } & \text { PRICE } & \text { PRICE } & \text { CLOSE } \\\hline \text {CALLS } & \text { OCT } & 85 & 163 / 4 & 10111 / 16 \\&\text { OCT } & 90 & 12 & 10111 / 16 \\&\text { OCT } & 95 & 75 / 8 & 10111 / 16 \\ \text { PUTS } &\text { OCT } & 85 & 1 / 8 & 10111 / 16 \\&\text { OCT } & 90 & 3 / 8 & 10111 / 16 \\&\text { OCT } & 95 & 13 / 16 & 10111 / 16\end{array}\end{array}$
-Refer to Exhibit 13-8. If you establish a long strap using the options with an 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:

Innovation

The process of translating an idea or invention into a good or service that creates value or for which customers will pay.

Contagion Theory

A theory in social psychology that explains how ideas, attitudes, and behaviors spread through populations as if they were infectious diseases.

Social Psychological Principles

Theoretical frameworks used to understand how individuals’ thoughts, feelings, and behaviors are influenced by the social context.

Behave Differently

To act or conduct oneself in a manner that is not consistent with one's usual behavior or with the expected norms.