Investments

A client with a large, well-diversified common stock portfolio expresses concern about a possible market decline. However, he/she does NOT want to incur the cost of selling a portion of their holdings NOR the risk of mistiming the market.

A possible strategy for him/her would be:A. Buy an index call option.B. Sell an index call option.C. Buy an index put option.D. Sell an index put option.

Why is the price of call falling and the price of put is rising when following variable issues occur1. Dividends are going up2. Exercise price is going up

A bond will sell at a discount when ——————–.a. the coupon rate is greater than the current yield and the current yield is greater than yield to maturityb. the coupon rate is greater than yield to maturityc. the coupon rate is less than the current yield and the current yield is greater than the yield to maturityd. the coupon rate is less than the current yield and the current yield is less than yield to maturitye. none of the above are true.

Solution:

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