Identify the Correct Statement Related to the Choice of Exercise

question 18

Multiple Choice

Identify the correct statement related to the choice of exercise price for buying a call.

• A)the higher the exercise price the higher the call premium
• B)the lower the exercise price the more likely the call option will expire out-of-the-money
• C)A higher strike price results in smaller gains on the upside but smaller losses on the downside
• D)the higher the exercise price the more dividends contribute to the overall profit
• E)none of the above are correct statements related to the choice of exercise price for buying a call

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Definitions:

Four Years

A period of time consisting of four consecutive years, often used in contexts such as terms of office, educational programs, or cycles.

Not-For-Profit Sector

Organizations that operate for purposes other than generating profit, often focused on social, charitable, or community goals.

Grooming

The process of building a relationship, trust, and emotional connection with someone to manipulate, exploit, or abuse them.

Internal Person

Another term for an inside candidate or an existing employee considered for opportunities within the same organization.