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A. Suppose the current stock price is $100. If the stock price increases soon, which action will provide the highest rate of return? buy $100
A. Suppose the current stock price is $100. If the stock price increases soon, which action will provide the highest rate of return?
buy $100 call, buy $100 put
buy $95 call, short $105 call
short $95 call, buy $105 call
buy $100 call, short 2 units of $100 calls, buy $105 call
B.You are positive that the XYZ stock price will change a lot in the near future. But you are not certain about the direction of price change. Which strategy is the best to use in this scenario?
Bull spread |
Bear spread |
Butterfly spread |
Straddle |
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