Which of the Following Is an Example of a Call

question 61

Multiple Choice

Which of the following is an example of a call option that is "out of the money"?

• A)option to sell at $11, stock is worth $12
• B)option to buy at $13, stock is worth $12
• C)option to buy at $12, stock is worth $12
• D)option to sell at $13, stock is worth $12

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Definitions:

Excess Supply

A situation where the quantity of a good or service supplied exceeds the quantity demanded at the current price, leading to downward pressure on the price.

Equilibrium Quantity

The amount of products or services that are both offered and sought after at the balance price, where the supply meets the demand exactly.

Quantity Supplied

The total amount of a good or service that producers are willing and able to sell at a specific price over a given period of time.

Quantity Demanded

The combined quantity of a product or service that consumers are inclined and ready to purchase at an identified price.