Which Contract Is an Option

question 35

Multiple Choice

Which contract is an option?

• A) A call
• B) A put
• C) A futures contract
• D) Both a call and a put

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Definitions:

Initial Outlay

The initial investment amount or initial cost incurred in starting a project, purchasing an asset, or initiating an investment.

Incremental Cash Flows

The additional cash flow generated by a company from undertaking a particular project or investment.

New Venture

Refers to a newly established business entity created with the intention of entering a market.

Opportunity Cost

The financial loss involved in not selecting the subsequent top preference during the decision-making process.