Which One of the Following Situations Will Produce the Highest

question 68

Multiple Choice

Which one of the following situations will produce the highest call price, all else constant? Assume the options are all in the money.

• A)$20 strike price; 45 days to option expiration
• B)$20 strike price; 60 days to option expiration
• C)$25 strike price; 45 days to option expiration
• D)$25 strike price; 60 days to option expiration
• E)Insufficient information is provided to answer this question.

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Definitions:

EBITDA Coverage Ratio

A financial ratio that measures a company's ability to pay off its operating expenses and debts with its EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization).

Debt Ratio

A financial ratio that compares a company’s total debt to its total assets, indicating the proportion of a company's assets that are financed by debt.

TIE Ratio

The times interest earned ratio, a financial metric measuring a company's ability to meet its debt obligations based on its current income.

Window Dress

Practices by mutual funds and other portfolio managers near the reporting period end to improve the appearance of the financial statements.