Figure 4-20 -Refer to Figure 4-20.If the Price Is $10,then There Would

question 29

Multiple Choice

Figure 4-20
-Refer to Figure 4-20.If the price is $10,then there would be a

• A)shortage of 400 units,and price would rise.
• B)surplus of 400 units,and price would rise.
• C)shortage of 600 units,and price would rise.
• D)surplus of 600 units,and price would rise.

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Definitions:

Put Option

A put option is a financial contract that gives the holder the right, but not the obligation, to sell a certain amount of an underlying asset at a specified price within a specific time frame.

Risk-Free Rate

The theoretical return on an investment with zero risk, often represented by the yield on government securities.

Strike Price

The specified price at which an option contract can be exercised.

Strike Price

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