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Even when the price of a stock is range-bound for several months, the

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Even when the price of a stock is range-bound for several months, the  [#permalink]

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New post 06 Jul 2018, 02:50
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A
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93% (00:42) correct 7% (00:57) wrong based on 61 sessions

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Even when the price of a stock is range-bound for several months, the volatility of its price within that range can swell the call option premium: the more the price of the stock moves, then the price of the stock's call options will be higher as a result.


A. the more the price of the stock moves, then the price of the stock's call options will be higher as a result
B. if the price of the stock has more movement, then the price of the stock's call options will be high
C. the more movement the price of the stock has, it is that much higher that the price of the stock's call options will be
D. the more the price of the stock moves, the higher the price of the stock's call options will be
E. when the price of the stock moves more, then the higher the price of the stock's call options

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Re: Even when the price of a stock is range-bound for several months, the  [#permalink]

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New post 06 Jul 2018, 04:29
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Bunuel wrote:
Even when the price of a stock is range-bound for several months, the volatility of its price within that range can swell the call option premium: the more the price of the stock moves, then the price of the stock's call options will be higher as a result.


A. the more the price of the stock moves, then the price of the stock's call options will be higher as a result
B. if the price of the stock has more movement, then the price of the stock's call options will be high
C. the more movement the price of the stock has, it is that much higher that the price of the stock's call options will be
D. the more the price of the stock moves, the higher the price of the stock's call options will be
E. when the price of the stock moves more, then the higher the price of the stock's call options



Answer B.

Correct parallelism of "If X....then Y...."

Conditional in meaning, X causes Y.


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Re: Even when the price of a stock is range-bound for several months, the  [#permalink]

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New post 06 Jul 2018, 05:08
Answer should be D.

The more...the higher..

It is similar to a OG question which talks about watt power rating
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Re: Even when the price of a stock is range-bound for several months, the  [#permalink]

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New post 06 Jul 2018, 05:35
kplusprinja1988 wrote:
Answer should be D.

The more...the higher..

It is similar to a OG question which talks about watt power rating



Yeah i guess it could be D. The "will be" at the end put me off.

here's the OG reference https://gmatclub.com/forum/manufacturers-rate-batteries-in-watt-hours-if-they-rate-the-132414.html

"the higher.....the more" is used in this question.

Can think of few more usages now

"the sooner...the better"

"the more.....the merrier"

"The longer......the more..."

"the more.....the more..."

"the more.....the better...."

Although i don't know the grammar behind it.

Maybe mikemcgarry can help out.



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Re: Even when the price of a stock is range-bound for several months, the  [#permalink]

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New post 06 Jul 2018, 05:57
The question throws a parallelism issue. A, C and E can easily be eliminated.

B. if the price of the stock ((has more movement,)) then the price of the stock's call options will be high - movement ?? Incorrect use of words.

D. //the more the price// of the stock moves, //the higher the price// of the stock's call options will be - parallel and correct meaning is conveyed.

Thus, D is best.

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Re: Even when the price of a stock is range-bound for several months, the  [#permalink]

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New post 06 Jul 2018, 08:11
D over B.

B. if the price of the stock has more movement, then the price of the stock's call options will be high --> Incorrect

D. the more the price of the stock moves, the higher the price of the stock's call options will be --> Correct

Hence, D.
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Re: Even when the price of a stock is range-bound for several months, the  [#permalink]

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New post 06 Jul 2018, 14:23
D over B.
Meaning of the sentence helped me to make the final decision between B and D.
Choice B is a conditional sentence. If x, then y. This kind of sentence construction means if condition X happens, then event Y happens.
In here means if the price of the stock has more movement, then the price of call options will be high. THIS IS WRONG.
The volatility of a stock is not the only factor to determine the price of the option.
It is more precise to say the more the price of the stock moves, the higher the price of the stock's call options will be
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Re: Even when the price of a stock is range-bound for several months, the &nbs [#permalink] 06 Jul 2018, 14:23
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