Which of the Following Statements Is CORRECT

question 24

Multiple Choice

Which of the following statements is CORRECT?

• A) Put options give investors the right to buy a stock at a certain exercise price before a specified date.
• B) Call options give investors the right to sell a stock at a certain exercise price before a specified date.
• C) Options typically sell for less than their exercise value.
• D) LEAPS are short-term options that have begun trading on the exchanges in recent years.
• E) Option holders are not entitled to receive dividends unless they choose to exercise their option.

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Definitions:

Bonds Payable

The total amount owed by a corporation or government entity to bondholders at the balance sheet date, representing long-term debt.

Accounts Payable

The amount of money owed by a company to its suppliers or creditors for goods and services received but not yet paid for.

Investing Activity

Activities related to the purchase or sale of long-term assets and investments, a component of a company's cash flow statement.

Financing Activity

Transactions involved in sourcing capital for the company operations and investments, which may include issuing bonds, obtaining loans, or repaying debt.