Exercising the Option Can Best Be Defined As

question 285

Multiple Choice

Exercising the option can best be defined as:

• A) The act of buying or selling the underlying asset via the option contract.
• B) The fixed price in the option contract at which the holder can buy or sell the underlying asset. Also the exercise price or strike price.
• C) The last day on which an option can be exercised.
• D) The change in the stock price divided by the change in the call price.
• E) A feature included in the terms of a new issue of debt or preferred shares to make the issue more attractive to initial investors.

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Definitions:

Responsiveness

The ability or tendency of an entity or system to react to changes, stimuli, or feedback from the environment.

Complements

Products that are usually consumed jointly (for example, bread and butter, hot dogs and hot dog buns). A decrease in the price of one will cause an increase in demand for the other.

Consumption

The use of goods and services by households or individuals, typically relating to how these actions affect economic demand.

Market Demand

The total amount of a product or service that all consumers in a market are willing and able to purchase at various prices.