The Roche Limit

question 14

Multiple Choice

The Roche limit

• A) is the distance at which a planet's tidal forces become equal to the self-gravity of an object.
• B) is the limit on the amount of mass an object can have in orbit.
• C) is the smallest orbit possible around a planet.
• D) only applies to the giant planets.
• E) only applies to stars.

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Definitions:

Current Stock Price

The price at which a stock is trading on the stock market at any given time.

Real Option

The opportunity to undertake certain business initiatives, such as deferring, abandoning, expanding, or contracting a project, based on future events.

Underlying Asset

A financial asset or instrument upon which a derivative’s price is based, including stocks, bonds, commodities, or currencies.

Call Option

A financial contract that gives the holder the right, but not the obligation, to buy a stock or other asset at a specified price within a certain period.