Sellers (Writers)of Call Options Can Close Out Their Position at Any

question 34

Multiple Choice

Sellers (writers) of call options can close out their position at any point in time by

• A)selling a put option on the same stock.
• B)buying identical call options.
• C)selling additional call options on the same stock.
• D)selling a put option on the same stock AND buying identical call options.

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Definitions:

Variable Overhead Efficiency Variance

The difference between actual variable overhead based on the standard hours allowed for the actual output and the actual variable overhead incurred.

Standard Machine-Hours

An accounting measure used to allocate manufacturing overhead costs to products based on the number of hours machines are expected to operate.

Variable Overhead Rate Variance

The difference between the expected (standard) cost of the variable overhead based on the actual production volume and the actual variable overhead incurred.

Standard Machine-Hours

A predetermined amount of time that a machine is expected to operate to meet production requirements.