QUESTION 57

1. Ginger bought 200 shares of ABC stock at $50/share. The stock price for ABC has appreciated to $70/share in nine months. Ginger expects that the stock is a good long-term hold with additional upside potential but is concerned that near-term weakness in the overall market could deplete her unrealized gains. Which of the following strategies would you recommend for Ginger?

   		a. Sell calls on the stock.
   		b. Buy calls on the stock.
   		c. Sell puts on the stock.
   		d. Buy puts on the stock.

QUESTION 58

1. Sam sells 20 LMF June 50 puts at $6. To establish a straddle, she should:

   		a. Buy 20 LMF June 40 puts.
   		b. Buy 20 LMF June 50 puts.
   		c. Sell 20 LMF June 50 calls.
   		d. Buy 20 LMF June 50 calls.