Which Strike Price Is Reflective of an Out-Of- The-Money Long

question 20

Multiple Choice

Which strike price is reflective of an out-of- the-money long call with an asset price of $34?

• A) $32
• B) $34
• C) $36
• D) $38

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Definitions:

Surplus

When the quantity supplied of a commodity surpasses the quantity demanded, often resulting in a decrease in price to balance the disparity.

Monopolist

An individual or entity that has exclusive control over the production and selling of a particular good or service.

Deadweight Loss

The decrease in economic effectiveness due to the inability to achieve or the unachievable status of market equilibrium for a specific good or service.

Marginal Cost

An elevation in the cumulative expense resulting from manufacturing one more unit of a product or service.