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

question 103

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 straddle using the options with an 85 exercise price, what is your dollar gain or loss if at expiration XYZ is still trading at 101 11/16?

• A) $18.75 loss
• B) $18.75 gain
• C) $1,668.75 gain
• D) $1,668.75 loss
• E) $1,687.50 loss

---

Definitions:

Needs

Refers to the essential requirements that individuals or organizations strive to fulfill, such as food, shelter, security, or business resources.

Influence Demand

The process of shaping consumer’s desire for a product or service through marketing strategies, economic factors, and social trends.

Marketing Mix

The combination of factors that a company can control to influence consumer's purchasing decisions, traditionally identified as product, price, place, and promotion.

Marketing Mix

A set of marketing tools that a firm uses to pursue its marketing objectives in the target market, traditionally identified as product, price, place, and promotion.