From the Lender's Point of View, Debt Can Be Evaluated

question 80

Multiple Choice

From the lender's point of view, debt can be evaluated as

• A)writing a call option on the borrower's assets with the exercise price equal to the face value of the debt.
• B)buying a call option on the borrower's liabilities with the exercise price equal to the market value of the debt.
• C)buying a put option on the borrower's assets with the exercise price equal to the face value of the debt.
• D)writing a put option on the borrower's assets with the exercise price equal to the face value of the debt.
• E)writing a put option on the borrower's liabilities with the exercise price equal to the market value of the debt.

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Definitions:

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