A "Call" Option Gives General Motors the Right to Sell

question 136

True/False

A "call" option gives General Motors the right to sell pounds at a specified price, while a put option gives General Motors the right to buy pounds at a specified price.

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Definitions:

Fixed Cost

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Certification

The process of officially recognizing someone as having met certain standards, often related to education, skills, or competencies.

Long Run

A time frame where all production elements and expenses can change, providing businesses the flexibility to adapt to market fluctuations.

Short Run

A period in which at least one input in the production process is fixed, limiting the ability to adjust the production level.