Multiple Choice
The leverage strategy of buying call options is based on the idea that:
A) a small change in the price of the underlying common stock can cause a large change in the price of the option.
B) leverage reduces the risk of loss on the option contract.
C) leverage reduces the risk of loss on the portfolio.
D) None of the above
Correct Answer:

Verified
Correct Answer:
Verified
Q67: All of the following are advantages of
Q68: A major disadvantage of using call options
Q69: If the market price is above the
Q70: Generally, the higher the beta, the greater
Q71: The popularity of options is due to
Q73: A put or call cannot be purchased
Q74: Calculate the leverage from holding a call
Q75: Block Corp. 40 call option is selling
Q76: Much of the liquidity and ease of
Q77: Option writers must own common stock in