1. Buying an underlying stock and simultaneously writing a call on the stock is similar to

a. short call.

b. long put.

c. long call.

d. short put.

2.

All of the following are true except:

a. The higher the strike price, the greater the value of a put option.

b. The higher the strike price, the greater the value of a call option.

c. The lower the stock price, the greater the value of a put option.

d. The higher the stock price, the greater the value of a call option.

3. If you write a put option,

a. the maximum profit equals the stock price minus the striking price.

b. the maximum loss equals the premium.

c. the maximum profit equals the premium.

d. the maximum profit is unlimited.