Tech Com Announces a Major Expansion into Internet Services

question 14

Multiple Choice

Tech Com announces a major expansion into Internet services. This announcement causes the price of Tech Com stock to increase, but also causes an increase in the volatility of the stock price. Which of the following correctly identifies the impact of these changes on the price of Tech Com call options?

• A)Both changes cause the price of the call option to decrease.
• B)Both changes cause the price of the call option to increase.
• C)The greater uncertainty will cause the price of the call option to decrease. The higher price of the stock will cause the price of the call option to increase.
• D)The greater uncertainty will cause the price of the call option to increase. The higher price of the stock will cause the price of the call option to decrease.

Understand how prices and income influence consumer demand.

Analyze utility functions to determine good consumption amounts.

Evaluate how changes in income affect consumer budget and choices.

Identify optimal consumption points using indifference curves and budget lines.

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Definitions:

Standards

Standards are established guidelines or specifications designed to ensure products, services, and processes are consistent, reliable, and fit for their intended purpose.

Corrective Action

Measures taken to identify and rectify a problem or deviation from a set standard or expectation.

Organizational Performance

An analysis of a company's efficiency, effectiveness, and ability to meet its goals and objectives.

Transformational Leadership

A leadership style that transforms and motivates followers by appealing to their higher ideals and moral values, often producing significant changes within the organization.