A DVD Player That Costs $168 Sells for a 30

question 48

Multiple Choice

A DVD player that costs $168 sells for a 30% markup based on the cost. What is the selling price of the DVD player?

• A) $560.00
• B) $50.40
• C) $129.23
• D) $218.40

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Definitions:

Call Option

is a financial contract that gives the buyer the right, but not the obligation, to buy a stock, bond, commodity, or other asset at a specified price within a specific time period.

American Call Option

A financial derivative that gives the buyer the right, but not the obligation, to buy a stock at a certain price within a specified time frame.

Exercise Price

The price at which the holder of an option can buy (call) or sell (put) the underlying security or commodity.

Option Prices

The cost to purchase an option, which gives the holder the right, but not the obligation, to buy or sell an asset at a specified price before a particular date.