The Price That the Buyer of a Put Option Pays

question 43

Multiple Choice

The price that the buyer of a put option pays to acquire the option is called the

• A) strike price.
• B) exercise price.
• C) execution price.
• D) acquisition price.
• E) premium.

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Definitions:

Equipment Account

An account on the balance sheet where the cost of purchasing equipment is recorded and progressively depreciated over time.

Specific Identification

An inventory costing method that tracks the actual cost of each individual item in inventory and assigns this cost to the goods sold.

FIFO Assumption

The First-In, First-Out method is an accounting assumption used to manage inventory and cost of goods sold, assuming the first items placed into inventory are sold first.

Subsidiary Shares

Shares owned by a parent company in a subsidiary, representing a controlling interest in that subsidiary.