Assume the current stock price is $50, a call option on that stock has a premium of $5, a put option on that stock has a premium of $3, the strike price on both options is $50, and you presently hold no position in the three. Suppose you take one of the following positions and the stock price drops to $47 per share at option expiry. Which position would earn the largest P/L?

Answer rating: 100% (QA)

ANS WER The position that would earn the largest P L is a long call option WOR... View the full answer