Globalization and Trade

question 75

Multiple Choice

Globalization and trade:

• A) reduce inflation in the short run but not in the long run.
• B) reduce inflation in the short run and in the long run.
• C) increase inflation in the short run but not in the long run.
• D) reduce inflation in the short run but increase inflation in the long run.

---

Definitions:

Exercise Price

The predetermined price at which the holder of an option can buy (call) or sell (put) the underlying asset or security.

Black-Scholes

A mathematical model used to determine the theoretical price of European-style options, factoring in time, volatility, interest rates, and dividend payments.

Intrinsic Value

The lower bound of an option’s value, or what the option would be worth if it were about to expire.

Out Of The Money

Refers to an option that would not result in a profit if exercised immediately because its strike price is less (for a call) or more (for a put) than the market price of the underlying asset.