You Buy a Call Option on Merritt Corp

question 91

Multiple Choice

You buy a call option on Merritt Corp. with an exercise price of $50 and an expiration date in July, and you write a call option on Merritt Corp. with an exercise price of $55 and an expiration date in July. This is called a ________.

• A) time spread
• B) long straddle
• C) short straddle
• D) money spread

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Definitions:

Real Property

Refers to land and anything permanently attached to the land, like buildings and structures.

Stock Investments

The act of putting money into financial schemes, shares, property, or a commercial venture with the expectation of achieving a profit, particularly through the purchase of equity securities in companies.

Tangible

Capable of being touched or felt; having physical substance.

Intangible Personal Property

Non-physical assets owned by an individual or a business, such as intellectual property, stocks, or bonds.