Which of the Following Is True for the Owner of a Call

question 11

Multiple Choice

Which of the following is true for the owner of a call option?

• A) The loss potential is unlimited.
• B) The profit potential is unlimited.
• C) The premium exceeds the strike price.
• D) There is no expiration date, unless the option is a European call.

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Definitions:

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or a business’s operating cycle, whichever is longer.

Balance Sheet

is a financial statement that provides a snapshot of a company's financial position at a specific point in time, detailing assets, liabilities, and shareholders' equity.

Unadjusted Trial Balance

A trial balance prepared at the end of an accounting period before adjusting entries are made.

Account Title

The name given to an account that reflects the type of transaction it represents, used in accounting to classify and record financial transactions.