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Determining the cost of the stock

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Reference no: EM132504381

Why do some stock options have an exercise price which is more than the cost of the stock?

a) For "call" options, this provides the option to buy at this price if the stock goes up before the exercise date.

b) The stock options sell for negative prices, because the investor will lose money if the stock price does not fluctuate.

c) New investors often mistake "put" and "call" options, leading to an easy profit for the dealer.

d) These options are "put" options, giving you the option to sell at a higher price.

Reference no: EM132504381

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