Question
1. An increase in a stocks price __________ the price of a call option and __________ the price of a put option. 2. With the
1. An increase in a stocks price __________ the price of a call option and __________ the price of a put option.
2. With the passage of time, the time premium paid for a call option __________ and the time premium paid for a put option __________.
3. Purchasing a call option __________ risk to the buyer.
4. The use of leverage __________ when an individual buys a put option.
5. A decrease in a stocks price causes the price of a put option on that stock to __________ and the price of a call option to __________.
6. An increase in a stocks price __________ an options strike price.
7. If the price of a put option declines, that suggests the price of a call with the same strike price and expiration date __________.
8. The distribution of dividends __________ the price of a call option.
9. The writer of a covered call may sustain a loss if the price of the stock __________.
10. If an option buyers gains increase, that implies the writers losses __________.
11. An investor sells a stock short. If the price of the stock increases, the loss on the short position __________.
12. If an investor buys a put, the potential profit on the position increases as the price of the stock __________.
13. If an investor establishes a protective put position, the maximum possible loss __________ if the price of the stock falls.
14. As a stock market index declines, the value of an index call option __________ and the value of an index put option __________.
15. An increase in the price of a stock after an options expiration __________ the value of the option.
16. A warrants price will decline if the price of the underlying stock __________.
17. When a call option is exercised, the number of shares the firm has outstanding __________.
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