The potential gain for a holder of a naked call option on a stock is _________.

Multiple Choice

• equal to the strike price plus the premium

  Incorrect

• larger with a higher strike price

• unlimited

• larger with a higher stock price

A put option on Brocklehurst Corp. has an exercise price of $30. The current stock price of Brocklehurst Corp. is $32. The put option is _________.

Multiple Choice

• at the money

• in the money

  Incorrect

• out of the money

• Not enough information to determine.