Under Free Trade,as Long as There Are International Differences in the Price

question 59

Multiple Choice

Under free trade,as long as there are international differences in the price of a good,the

• A) good will be exported by the country where its price is relatively high.
• B) price will continue to rise in both the importing and exporting countries.
• C) price will fall in the exporting country and rise in the importing country.
• D) good will be imported by the country where the price is relatively high.
• E) quantities being imported must be greater than the quantities being exported.

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Definitions:

Covered Call

An options strategy where an investor holds a long position in an asset and sells call options on that same asset to generate income from the option premiums.

Exchange-Traded Options

Options contracts that are traded on a regulated exchange rather than being dealt with privately between two parties.

OTC Options

Over-the-counter options are trades made directly between two parties, not on a formal exchange, tailored to the parties' requirements.

Counterparty Credit Risk

The risk that the other party in a financial transaction might default on their contractual obligations.