SIE practice questioneasyCall options
An investor who purchases a call option expects the price of the underlying stock to:
- ADecrease dramatically
- BFall
- CRemain flat
- DRise✓ Correct answer
Explanation
Why D — Rise
A call option gives the buyer the right to buy the underlying asset, so the investor profits if the stock price rises. The other options are incorrect because falling or flat prices do not benefit a long call position.
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