Elizabeth Owns a Call Option on 100 Shares of Microsoft

question 14

Multiple Choice

Elizabeth owns a call option on 100 shares of Microsoft stock and she has just decided to purchase those shares. This purchase is commonly referred to as:

• A) striking the asset.
• B) expiring the option.
• C) exercising the option.
• D) placing the collar.
• E) the collar option.

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Definitions:

Full Employment

A situation in an economy where all available labor resources are being used in the most efficient way possible, typically characterized by the absence of involuntary unemployment.

Full Production

A state of economic production in which all available resources (labor, capital, etc.) are being used efficiently, leading to the maximum possible output.

Capacity Utilization

The percentage of a country's production capacity that is actually being used over a certain period of time, indicating the overall economic activity and efficiency.

Labor Unemployment

A situation where individuals who are willing and able to work are unable to find employment, often measured by the unemployment rate.