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It is May 19th and you own a June, European call on ABC Corp. with an exercise price of $50. The… 1 answer below » It is May 19th and you own a June, European call on ABC Corp. with an exercise price of $50. The option trades at $40 and ABC is trading at $86. What should you do? 1)Buy more options on ABC Corp. 3) Sell your ABC stock before its price declines. 4) Sit and wait until the June expiration. Stocks that have more volatile price changes have more valuable call options because call holders: Question options: 1) capture upside potential without downside risk. 3) have too little variability in the exercise price. 4) have transferred all risk to put holders. Three months back you bought for $ View complete question » It is May 19th and you own a June, European call on ABC Corp. with an exercise price of $50. The option trades at $40 and ABC is trading at $86. What should you do? 1)Buy more options on ABC Corp. 3) Sell your ABC stock before its price declines. 4) Sit and wait until the June expiration. Stocks that have more volatile price changes have more valuable call options because call holders: Question options: 1) capture upside potential without downside risk. 3) have too little variability in the exercise price. 4) have transferred all risk to put holders. Three months back you bought for $4 a put option on a stock with an exercise price of $100. If the stock price at expiration of this option is $92, what is your return on investment? Question options: 1) 200% 2) 150% 3) 100% View less » Sep 15 2015 06:16 PM
