The ____ Is the Price That the Call Option Buyer

question 49

Multiple Choice

The ____ is the price that the call option buyer pays the writer of the option if the buyer decides to exercise the option.

• A) option premium
• B) option discount
• C) conversion price
• D) exercise price

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Definitions:

Perpetual Inventory Method

An inventory management system that continuously updates the quantity and value of inventory on hand and sold, using real-time data.

Financial Statements

Reports summarizing the financial performance, position, and cash flows of a business for a specific period, including balance sheet, income statement, and statement of cash flows.

Contra Accounts

Accounts used in accounting to reduce the value of a related account to derive its net balance; examples include accumulated depreciation.

Normal Balances

The side of an account (debit or credit) where increases to the account are recorded; assets and expenses typically have debit normal balances, while liabilities, equity, and revenue have credit normal balances.