How Can a Firm Best Protect Itself Against an Interruption

question 57

Multiple Choice

How can a firm best protect itself against an interruption in the supply of parts?

• A) Transport the parts in its own transportation vehicles.
• B) Maintain more than one supply source.
• C) Use suppliers from the city where the firm is located.
• D) Select suppliers through a competitive bidding process.

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Definitions:

November 47.50 Call

A call option contract for the right to buy a specific financial instrument at a price of 47.50, expiring in November.

Call

A Call option is a financial contract that gives the option buyer the right, but not the obligation, to buy a stock, bond, commodity, or other asset at a specific price within a specific period.

European Put

A type of option contract that gives the holder the right, but not the obligation, to sell an underlying asset at a specified price on or before a specific date.

European Call

An option contract giving the holder the right, but not the obligation, to buy a specified asset at a predetermined price on or before a specific expiration date, only exercisable on the expiration date.