Apotetve put strategy is adding a long put to a portfolio consisting of an asset. Typically, a protective put is A) B) C) D) In the money Out of the money At the money Deep in the money 35. A covered call writing position is equivalent to Along position in the stock and a long position in the call option A short position in the stock and a long position in the call option Q A strap is a variation of a straddle involving two calls and one put. A long strap is an appropriate strategy if 36. A) B) C) D) An investor wishes to generate additional income An investor wishes to insure against a decline in share values An investor expects share prices to remain in a trading range An investor expects share prices to be volatile, but is inclined to be bullish 37. For at-the-money stock options, put-call parity requires that, for otherwise similar options, A) Puts sell for more than calls B) Puts sell for the same price as calls C) Puts sell for less than calls D) All of the above are possible Hint: S+P-C=PV(X) 38. Assume the stock price is $50/share, 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/share. Which position would have gained the most dollars? A) Writing a naked call B) Writing a covered call C) Writing a covered put D) Selling the stock short