An Option That Gives the Owner the Right, but Not

question 146

Multiple Choice

An option that gives the owner the right, but not the obligation, to sell an asset is called a:

• A) Parity option.
• B) Call option.
• C) Put option.
• D) Straddle option.
• E) Strangle option.

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Definitions:

Unavoidable Waste

Waste that cannot be reduced or eliminated during the production process due to inherent limitations or efficiency constraints.

Unexpected Spoilage

Loss or waste of materials, products, or resources that occurs unexpectedly during the production process and is not a part of planned spoilage.

Normal Spoilage

Normal spoilage refers to the expected amount of waste or loss of materials during a production process, considered as a usual and unavoidable cost of doing business.

Unfavorable Variance

A situation where actual costs exceed budgeted or expected costs, often indicating poorer than expected financial performance.