Question: Explain which option ( i.e . put or call) positions ( i.e . long or short) offers the most risk. Explain how a firms equity

Explain which option (i.e. put or call) positions (i.e. long or short) offers the most risk.

Explain how a firms equity can be compared to a call option. How does this help explain why managers may select riskier projects at the expense of bondholders?

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