The Difference Between the Values of the Buyer and Seller

question 36

Multiple Choice

The difference between the values of the buyer and seller is referred to as the

• A) value discrepancy.
• B) spread.
• C) bargaining surplus.
• D) negotiation gap.

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Definitions:

Intrinsic Value

The actual, perceived, or calculated value of an asset, investment, or company based on fundamental analysis without reference to its market value.

Strike Price

The predetermined price at which the holder of an option can buy (call) or sell (put) the underlying asset.

Strike Price

The specified price at which the buyer of an option can buy (for a call option) or sell (for a put option) the underlying asset.