A Stock Is Selling at $85 at the Expiration of an Option

question 35

Multiple Choice

A stock is selling at $85 at the expiration of an option contract.Which of the following options will most likely be exercised?

• A)Buyer of a call option with exercise price of $65.
• B)Buyer of a put option with exercise price of $65.
• C)Buyer of a call option with exercise price of $80.
• D)Buyer of a put option with exercise price of $85.

Understand the concept of net present value and its application in investment decision-making.

Comprehend the definition and significance of annuities in financial calculations.

Calculate the cash payback period and its relevance in evaluating investment opportunities.

Determine the best payback period among multiple investment options.

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Definitions:

Small-Batch Production

Manufactures a variety of products crafted to fit customer specifications.

Better Ways

Innovative or more effective methods and practices that improve processes or outcomes.

Operations Management

Is the process of managing productive systems that transform resources into finished products or services.

Executive Compensation

Refers to the financial payments and other benefits such as bonuses, shares, and options provided to high-level management and executives in a company.