An Ideal Spring, with a Pointer Attached to Its End

question 45

Multiple Choice

An ideal spring, with a pointer attached to its end, hangs next to a scale.With a 100-N weight attached, the pointer indicates "40" on the scale as shown.Using a 200-N weight instead results in "60" on the scale.Using an unknown weight X instead results in "30" on the scale.The weight of X is:

• A)20 N
• B)30 N
• C)40 N
• D)50 N
• E)75 N

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Definitions:

Right to Buy

A privilege granted to shareholders or options holders to purchase additional shares within a company at a predetermined price and time.

All-Equity Firm

A company that finances its operations and investments solely through equity without any debt financing.

Exercise Price

The price at which the holder of an options contract may buy (call) or sell (put) the underlying security.

Warrants

Financial derivatives that give the holder the right, but not the obligation, to buy or sell a stock at a specified price before a certain date.