If the Market Is in Equilibrium, Then an Option Must

question 18

True/False

If the market is in equilibrium, then an option must sell at a price that is exactly equal to the difference between the stock's current price and the option's strike price.

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Definitions:

Direct Election

A system of choosing political officials where voters directly cast ballots for the person or political party they desire to see in office.

Senators

Members of the Senate, one of the two houses of the legislature in various countries, including the United States, elected to represent states or territories and participate in law-making.

Constitution

The supreme law of the United States, establishing the framework of the national government, its powers, and the rights of its citizens.

Grandfather Clause

A legal or policy provision that allows certain individuals or activities to continue under old rules while new rules apply to all future cases, often used to exempt some people from new regulations.