All of the Following Are True of Calls and Puts

question 15

Multiple Choice

All of the following are true of calls and puts EXCEPT

• A) options are issued by businesses.
• B) the financial manager of a company has very little need to deal with options.
• C) the presence of options trading in the firm's stock could, by increasing trading activity, stabilise the firm's share price in the marketplace.
• D) options are not a source of funding to the corporation.

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Definitions:

Discrete Probability Distributions

Probability distributions that deal with discrete random variables, which have countable outcomes.

Standard Deviation

A measure of the amount of variation or dispersion in a set of values, showing how much each value in the set deviates from the mean.

Toll Station

A point at which drivers are charged a fee to use a bridge, road, or tunnel.

Standard Deviation

A metric showing the extent of deviation or scatter of data points, highlighting the distance of these points from the central value.