Partitioning the equity position into its component parts

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Reference no: EM131896970

1. Partitioning the equity position into its component parts:

A) allows the relative importance of each component to be assessed.

B) treats each component of the equity position identically.

C) requires that all components of the equity position be discounted at the risk-free rate.

D) none of the above.

2. You establish the following position:

Long 100 ABCD 150 Call

Long 100 ABCD 150 Put

If the price of ABCD is $150 at expiration, what is the resulting ABCD position in your account on the business day following expiration?

a. Flat or no position in ABCD

b. Long 100,000 shares of ABCD

c. Short 100,000 shares of ABCD

d. Both B and C

Reference no: EM131896970

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