A Call Option Described as Out of the Money Would

question 80

Multiple Choice

A call option described as out of the money would find:

• A) the market price of the stock is above the strike price.
• B) the option has been exercised.
• C) the option has expired.
• D) the strike price is above the market price of the stock.

---

Definitions:

Franchise Agreement

A legal, binding contract between a franchisor and franchisee, outlining the terms and conditions for running a franchised business.

Cost Recovery Method

A revenue recognition method where no profit is recognized until the costs of the sold goods or services are fully recovered.

Installment Sales

A method of sale that allows the buyer to make payments over a period of time, while the seller recognizes income as payments are received.

Collectibility

The likelihood or ability of a company to collect payments from customers for goods or services provided, considered when recognizing revenue.