rkapoor

I don’t understand how it’s not C. The question asked:


The question asked , if the Mountain Hawk stock declines to $88.00, which dericatives strategy will most likely give the highest value at expiration.
In other words, How much would you pay for those positions at time of expiry?

A) 7 bucks

B) nothing

C) 10 bucks

pimpineasy

For a) are you saying since you own the stock - you are effectively paying only 7?
For b) you own the stock, sell a call - your final position is the stock you owned. Since Call is OTM - you pay 0 for the position?
For c) Value is 10.
And among the 3 - it is the biggest?
Jeff - what was the answer posted (correct answer description and reasoning)?