Consider two put options differing only by exercise price. The one with the higher exercise price has
a. the lower breakeven and lower profit potential
b. the lower breakeven and greater profit potential
c. the higher breakeven and greater profit potential
d. the higher breakeven and lower profit potential
e. the greater premium and lower profit potential
Answer: D
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Basic Option Strategies
- A synthetic short put position can be created with which of the following sets of transactions.
- A synthetic long call position can be created with which of the following sets of transactions.
- Identify the correct statement related to the choice of exercise price for buying a call.
- Which of the following statements about a covered call writing strategy is true?
- Which of the following investors may be obligated to buy stock?
- The difference in profit from an actual put and a synthetic put is
- Which of the following is the breakeven for a protective put?
- Which of the following strategies has essentially the same profit diagram as a covered call?
- Which of the following strategies has the greatest potential loss?
- Each of the following is a bullish strategy except
- Early exercise imposes a risk to all but one of the following transactions.
- Which of the following is equivalent to a synthetic call?
- Which of the following transactions does not profit in a strong bull market.
- Which of the following statements is true about closing a long call position prior to expiration relative to holding it to expiration?
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