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Options Allow the Investor to Mold a Risk/return Relationship

question 44

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Options allow the investor to mold a risk/return relationship.


Definitions:

Price-Earnings Ratio

A measure used to value a company that shows how much investors are willing to pay per dollar of earnings.

Earnings Per Share

A company's profit divided by the outstanding shares of its common stock, indicating profitability.

Market Price

The ongoing market price for an asset or service available for purchase or sale.

Total Asset Turnover

A financial ratio that measures the efficiency of a company's use of its assets to generate sales revenue.

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