Which of the Following Is the Best Definition of Put

question 281

Multiple Choice

Which of the following is the best definition of put option?

• A) A plot showing the gains and losses that will occur on a contract as the result of unexpected price changes.
• B) An option that gives the owner the right, but not the obligation, to sell an asset.
• C) A plot showing how the value of the firm is affected by changes in prices or rates.
• D) An agreement by two parties to exchange, or swap, specified cash flows at specified intervals in the future.
• E) Short-run financial risk arising from the need to buy or sell at uncertain prices or rates in the near future.

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Definitions:

Job Specification

A written statement that explains what a job demands of jobholders and the human skills and factors required.

Jobholders

Individuals who are currently employed and hold a position within an organization.

Measured Performance

The evaluation and documentation of an employee's work output and productivity based on predefined criteria and objectives.

Corrective Action

Measures taken to identify, eliminate, and prevent recurrence of undesirable performances or non-conformities in a process.