The Following Is an Extract from Ian’s Balance Sheets at 31

question 4

Multiple Choice

The following is an extract from Ian’s balance sheets at 31 December 20X1 and 20X2 shows the following information about net current assets:

Which one of the following statements is correct?

• A) There has been a cash inflow in respect of debtors
• B) There has been a cash inflow in respect of creditors
• C) Working capital has decreased
• D) There has been a cash inflow in respect of stock

---

Definitions:

Delta-hedging

A strategy used in options trading to reduce the risk of price movements of the underlying asset by offsetting positions.

Options Sellers

Parties in an options contract who take on the obligation to buy or sell the underlying asset if the options buyer exercises their right.

Markets

Platforms or systems where buyers and sellers interact to trade goods, services, securities, or other assets.

Call Option Valuation

The process of determining the value of a call option, which gives the holder the right, but not the obligation, to buy an asset at a specified price within a specific time frame.