Andrew thinks the stock of LoJo, Inc. is about to increase in value as a result of the success of a number of the company’s products. If he is correct, Andrew can earn the highest return on his investment by:

CFA Level I
#1

Andrew thinks the stock of LoJo, Inc. is about to increase in value as a result of the success of a number of the company’s products. If he is correct, Andrew can earn the highest return on his investment by: a. selling put options on LoJo. b. selling call options on LoJo. c. buying call options on LoJo. d. buying loJo stock and simultaneously selling call options on the stock.

#2

C?

#3

I go with C

#4

C

#5

C… just think of the payoff diagrams…

#6

C. But I read it several times. Couldn`t imagine that it is easy…

#7

Yes, it is C.