The writer of a call option is theoretically exposed to an unlimited loss
Indicate whether the statement is true or false.
Answer: TRUE
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The reward-to-risk ratio for stock A is less than the reward-to-risk ratio of stock B. Stock A has a beta of 0.82 and stock B has a beta of 1.29. This information implies that:
A) stock A is riskier than stock B and both stocks are fairly priced. B) stock A is less risky than stock B and both stocks are fairly priced. C) either stock A is underpriced or stock B is overpriced or both. D) either stock A is overpriced or stock B is underpriced or both. E) both stock A and stock B are correctly priced since stock A is riskier than stock B.
According to the Equal Pay Act, employers are permitted to pay workers performing the same job different pay rates when the differences are
A. based on demographics. B. Employers can never use differential pay rates. C. based on anticipated lifespan of the worker. D. based on merit, seniority or quality or quantity of production.