The Strike Price of an Option Is

question 75

Multiple Choice

The strike price of an option is:

• A) the market price at the time the option is written.
• B) the market price at the time the option is exercised.
• C) the price at which the option holder has the right to buy or sell.
• D) always above the market price.

---

Definitions:

Cash Flow To Creditors

A firm’s interest payments to creditors less net new borrowings.

Long-Term Loan

A type of financing that is paid back over an extended time frame, extending beyond one year.

Capital Gains

The gain realized when the price at which an asset or investment is sold surpasses the price it was originally bought for.

Eligible Dividends

Dividends that are entitled to a reduced tax rate in certain jurisdictions, often meeting specified criteria set by the tax authorities.