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.