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You are working as a portfolio manager in a small private fund. You have been analysing equities and found out that Tesla is overpriced. You
You are working as a portfolio manager in a small private fund. You have been analysing equities and found out that Tesla is overpriced. You are going to use options to capitalise on your beliefs. Taking into account that your funds are modest and you are the only analyst in the fund, you will: Select one: a. Write a put and buy a call with higher strike b. Buy one call and sell another call with higher strike c. Write a call and buy a put with lower strike d. Buy one put and write another put with lower strike e. Go long in call and put options with the same strike f. Go short in call and put options with the same strike g. Go long in call and put options with the different exercise prices h. Go short in call and put options with the different exercise prices i. Write a put and buy a call with lower strike j. Buy one call and sell another call with lower strike k. Write a call and buy a put with higher strike 1. Buy one put and write another put with higher strike At maturity, the intrinsic value of a call is zero: Select one: a. If the underlying asset price is greater than the strike price b. If the underlying asset price is equal to the exercise price c. If the spot price is bigger than the exercise price d. Never e. If the price for the underlying asset is too volatile during the term of the contract If an investor believes in the increase of the asset price, but wants protection from unfavourable stock price movements, he or she is mostly likely to implement the following strategy: Select one: a. Vertical Bull spread b. Call Bull spread c. Vertical Bear spread d. Put bear spread e. Long straddle f. Long strangle g. Short straddle h. Short strangle
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