In Option Contracts, One Side Has the Obligation to Perform

question 44

True/False

In option contracts, one side has the obligation to perform if the other side forces the exchange. In futures contracts, both sides have the obligation to perform.

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Definitions:

Units in Process

An inventory classification representing products partially completed in the manufacturing process, often evaluated at the end of an accounting period.

First-In, First-Out

An inventory valuation method where goods first acquired are the first to be sold.

Process Costing

A costing method used for homogeneous products, where costs are accumulated for a process or department and averaged over all units produced.

Total Cost

The aggregate expense incurred in producing a product or offering a service, including fixed and variable costs.