Mr J has a bullish outlook on the stock price movement. What is the possible option strategies he can apply?

FIN 60804

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Business
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University
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Medium
kelvin lee
Used 3+ times
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8 questions
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1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following is a primary reason for a company to use futures contracts?
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which strategy involves buying a futures contract at a lower price and selling it at a higher price to profit from price movements?
Long call
Speculating
Hedging
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following factors is most likely to have a significant impact on the movement of a stock index?
Seasonal weather patterns
Changes in individual stock prices within the index
Localized events in a single small city
The personal spending habits of a single investor
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following factors is most likely to affect the price of Crude Palm Oil (CPO)?
Technological advancements in electronics
Changes in global soybean oil production
The launch of a new smartphone
Popularity of a new fashion trend
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following best describes a bull call spread strategy in options trading?
Buying a call option with a higher strike price and selling a call option with a lower strike price
Buying a call option and selling a put option with the same strike price
Buying a call option with a lower strike price and selling a call option with a higher strike price
Selling a call option and buying a put option with the same strike price
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Mr. A buys a call option (strike price of $3) with a premium of $0.50. Given that the stock price at maturity is $2.50, what is the possible gain/loss?
Gain $1
Gain $0.50
Loss $1
Loss $0.50
8.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Mr. A buys a put option (strike price of $3.50) with a premium of $0.50. Given that the stock price at maturity is $2.50, what is the possible gain/loss?
Gain $1
Gain $0.50
Loss $1
Loss $0.50
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