QUESTIONS 91 THROUGH 96 RELATE TO DERIVATIVE INVESTMENTS.
96. An investor with $5000 to invest believes that the price of ABC Corp. stock will appreciate by $7
to $95 in two months. The two-month at-the-money put on one share of ABC stock costs $1.76,
while the two-month at-the-money call costs $1.56. In order to profit from his view on ABC stock,
he will most likely:
A.
sell calls on shares of ABC.
B.
sell puts on shares of ABC.
C.
buy calls on shares of ABC.