The Intrinsic Value Approach Ignores Two Types of Costs

question 2

Multiple Choice

The intrinsic value approach ignores two types of costs:

• A)interest cost and opportunity cost.
• B)opportunity cost and exercise cost.
• C)interest cost and option cost.
• D)carrying cost and interest cost.

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Definitions:

Stop-Payment Order

A request made to a bank by an account holder to not pay out on a check or transaction previously issued or authorized.

Liability

Legal responsibility for one's actions or inactions, particularly in causing harm to others or to property, which may result in civil or criminal penalties.

UCC

Uniform Commercial Code, a comprehensive set of laws governing all commercial transactions in the United States.

Traveler's Check

A preprinted, fixed-amount check designed to allow the person signing it to make an unconditional payment to someone else as a result of the payee's acceptance.