In a Competitive Market, When Price Is Below the Equilibrium

question 75

Multiple Choice

In a competitive market, when price is below the equilibrium price, there will be pressure for the price to:

• A) fall.
• B) stay the same.
• C) rise.
• D) change only if demand and/or supply change.

Recognize the advantages of exchange-traded options over OTC options.

Discern the financial outcomes and risks associated with complex option positions.

Understand the implications of exercise and expiration for options and warrants, including effects on stock dilution or on the position’s value.

Interpret the role of margins in options trading and identify specific options that may require or exempt traders from posting margins.

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