If You Thought the Share Price of a Stock Was

question 44

Multiple Choice

If you thought the share price of a stock was going to fall,would you be more likely to buy a call option or a put option?

• A) a call option
• B) a put option
• C) a call option and a put option
• D) There is not enough information given to answer this question.

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Definitions:

Perfect Price Discrimination

A pricing strategy where a seller charges each buyer the maximum price the buyer is willing to pay.

Consumer Surplus

The difference between what you pay for some good or service and what you would have been willing to pay.

Senior Citizens

Individuals who are typically above the retirement age, usually considered to be 65 years or older, often eligible for certain social benefits.

Elastic Demand Curves

Demand curves that show a significant change in quantity demanded when prices change, indicating sensitivity to price alterations.