Max Is Preparing a Contract Between His Company and One

question 33

Multiple Choice

Max is preparing a contract between his company and one in Mexico. What should he do when citing numbers in the contract?

• A)Use the metric system.
• B)Use American currency figures.
• C)Write all months as figures rather than as words.
• D)Avoid using any figures in the contract.

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Definitions:

Call Option

A financial contract that gives the holder the right, but not the obligation, to buy a specified amount of an underlying asset at a specific price within a certain time frame.

Exercise Price

The set price at which an option contract can be exercised, determining the price at which the underlying security can be bought or sold.

Option Premium

The price that an investor pays to buy an options contract, which gives them the right, but not the obligation, to buy or sell an underlying asset at an agreed-upon price.

Profit or Loss

The financial result of an entity's operations and transactions, representing earnings exceeding costs or losses.