The Right to Sell a Specified Asset at a Specified

question 46

Multiple Choice

The right to sell a specified asset at a specified price up until a specified date is called a(n) :

• A)American-style put option
• B)American-style call option
• C)European-style call option
• D)European-style put option

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Definitions:

Economies of Scale

The reduction in per-unit production costs resulting from an increase in the scale of production.

Service Provider

A company or an individual that offers services to others in exchange for payment, such as telecommunications, utilities, or healthcare.

Opportunity Costs

The cost of the most favorable alternative that is lost by deciding on a particular option.

Returns to Scale

The change in output resulting from a proportional change in all inputs used in the production process.