The Writer of a Put Option Hopes That the Price

question 81

Multiple Choice

The writer of a put option hopes that the price of the underlying stock will rise because

• A) the option is more likely to be exercised.
• B) the option is less likely to be exercised.
• C) the buyer of the put will have to purchase the stock at a higher price.
• D) the value of the put option will increase in the secondary market.

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Definitions:

Delirium

An acute, often sudden, state of confusion and disorientation due to physical or mental illness.

Dementia

A broad category of brain diseases that cause a long-term and often gradual decrease in the ability to think and remember, significantly affecting daily functioning.

Aphasia

A condition marked by the loss or impairment of the ability to speak, write, or understand language, typically as a result of brain damage.

Stereotypical Words

Language that reflects generalized and oversimplified beliefs or impressions about a particular group of people or things.