To Maximize His/her Potential Upside Returns,ceteris Paribus,an Investor Who Was

question 44

Multiple Choice

To maximize his/her potential upside returns,ceteris paribus,an investor who was bullish on a particular stock would execute which of the following options strategies:

• A)buy calls
• B)write calls
• C)buy puts
• D)write puts

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Definitions:

Economic Model

A theoretical construct representing economic processes by a set of variables and a set of logical and/or quantitative relationships between them.

Simplified

Made easier to understand or do; reduced in complexity.

Reality

The state of things as they actually exist, as opposed to how they may appear or may be thought to be.

Invisible Hand

A metaphor introduced by Adam Smith to describe how individuals pursuing their own interests unintentionally benefit society as a whole.