(Figure: Externalities A) in This Figure, Which Two Points Include

question 32

Multiple Choice

(Figure: Externalities A) In this figure, which two points include a positive externality?

• A) A and B
• B) C and D
• C) A and C
• D) B and D

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Definitions:

American Call Option

A type of options contract that allows the holder to buy a specified amount of an underlying asset at a set price before the contract expires.

Exercise Price

The rate at which an individual holding an option can acquire (if it's a call option) or offload (if it's a put option) the fundamental asset.

Option Expiration

The predetermined date on which an option contract becomes invalid and the right to exercise it no longer exists.

Interest Rate Collar

A financial derivative strategy used to hedge against interest rate fluctuations by setting upper and lower bounds on interest rates.