For a Call and a Put Written on the Same

question 15

Multiple Choice

For a call and a put written on the same underlying but at at possibly different strike prices,

• A) Both call and put options may be in-the-money at the same time.
• B) If the call is in-the-money, then the put will be out-of-the-money.
• C) If one of the options is out-of-the-money, then the other one is guaranteed to be in-the-money.
• D) At least one option will be in-the-money.

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Definitions:

Negotiation Process

The series of actions or steps taken by parties to communicate and come to an agreement or resolve disputes.

Authority

The right or power assigned to an individual or organization to make decisions, give orders, and enforce obedience.

Right to Intervene

The right to intervene refers to the authority or permission for an external party to become involved in a situation or dispute, usually to provide assistance or enforce rules.

Arbitration

A dispute resolution technique involving a neutral third party who decides on the outcome, often legally binding.