A Company Has Decided to Outsource the Production of Key

question 37

Multiple Choice

A company has decided to outsource the production of key components for its main product to suppliers.What effect will this have on the product's bill of materials?

• A)None.
• B)The bill of materials will be wider.
• C)The bill of materials will be deeper.
• D)The bill of materials will be flatter.

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Definitions:

Exercise Price

The cost at which an option's holder may purchase (for a call option) or sell (for a put option) the base asset.

Put Option

A financial contract giving the holder the right, but not the obligation, to sell a specific amount of an underlying asset at a set price within a specified time.

Stock Split

An action by a company to divide its existing stock into multiple shares to boost the liquidity of the shares, although the overall value of the shares remains the same.

Dow Jones

Dow Jones refers to the Dow Jones Industrial Average, a stock market index that measures the stock performance of 30 large companies listed on stock exchanges in the United States.