Open Interest Refers to the Dollar Amount of Outstanding Option

question 120

True/False

Open interest refers to the dollar amount of outstanding option contracts.

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Definitions:

Annual Coupon

The yearly interest payment made to bondholders, expressed as a percentage of the bond's face value.

Bond-Yield-Plus-Risk-Premium

A method of estimating the cost of equity by adding a risk premium to the observed yield of a company’s long-term debt.

WACC

An assessment of a firm's cost of capital, where each category of capital is proportionally weighted to calculate the average cost.

Marginal Costs

Marginal costs refer to the change in total cost that arises when the quantity produced is incremented by one unit.