Final answer:
The likely strategy for expecting KO stock to be between $60 and $70 is to initiate a bull call spread by going long on a KO March 60 call and short on a KO March 70 call, which offers limited profit potential within the specific price range and limits potential losses to the net premium paid. The correct option is A. long a KO March 60 call and short a KO March 70 call
Step-by-step explanation:
If you expect Coca-Cola's (KO) stock price to be between $60 and $70 by March, the strategy you would most likely use is long a KO March 60 call and short a KO March 70 call.
This strategy is known as a bull call spread. By purchasing a call option with a strike price of $60 (long position), you can profit from the stock's increase up to the strike price of the call option you sold at $70 (short position).
If KO stock reaches anywhere between $60 and $70, you will be able to buy the stock at the lower strike price and benefit from the increase.
However, your profits are capped at the higher strike price due to the call option sold. This strategy limits your potential loss to the net premium paid while providing a limited profit potential within the expected range of the underlying asset's price. The correct option is A. long a KO March 60 call and short a KO March 70 call