The Expenses You Encounter When You Buy in One Market

question 198

Multiple Choice

The expenses you encounter when you buy in one market and sell in a distant market are known as

• A)production costs.
• B)fixed costs.
• C)transactions costs.
• D)sunk costs.

---

Definitions:

Conversion Value

In convertible securities, the value of the security if it were converted into a different form, such as from a bond to stock.

Straight Bond Value

The value of a bond that pays a fixed interest rate and does not have any embedded options or features.

European Option

A type of options contract that can only be exercised at the expiration date, not before.

Expiration Date

The date on which a contractual agreement, option, or financial instrument becomes invalid or requires renewal.