Explain how this statement can be true: A long call position offers potentially unlimited gains, if the

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Explain how this statement can be true: "A long call position offers potentially unlimited gains, if the underlying asset's price rises, but a fixed, maximum loss if the underlying asset's price drops to zero."

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Foundations Of Financial Markets And Institutions

ISBN: 9780136135319

4th Edition

Authors: Frank J Fabozzi, Franco G Modigliani, Frank J Jones

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Question Posted: Mar 02, 2024 05:01 AM

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Explain how this statement can be true: A long call position offers potentially unlimited gains, if the

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Answer The statement is true because of the nature of options contracts and the way they function Le...View the full answer

Foundations Of Financial Markets And Institutions

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