An Option Is a Security That Is Neither Debt nor Equity

question 128

True/False

An option is a security that is neither debt nor equity but derives its value from an underlying asset that is often another security.

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Definitions:

Product Demand

The desire and willingness of consumers to purchase a particular good or service at a given price.

Oligopoly

A market structure characterized by a few firms dominating the industry, leading to limited competition and potentially higher prices for consumers.

Pure Competition

A market scenario where numerous sellers offer homogenous products, making the market highly competitive.

Differentiated Oligopoly

A market structure where a few firms dominate the industry but offer products that are distinct in some aspect, leading to non-price competition among them.