Disequilibrium Does Not Exist When

question 48

Multiple Choice

Disequilibrium does not exist when

• A) there is a shortage.
• B) there is a surplus.
• C) the existing price is above the equilibrium price.
• D) the existing price is below the equilibrium price.
• E) quantity demanded and quantity supplied are equal.

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Definitions:

Put

It refers to an options contract giving the holder the right but not the obligation to sell a specified amount of an underlying security at a predetermined price within a specified time frame.

Underlying Asset

The financial asset that determines the value of a derivative instrument or structured product.

Treasury Bills

Short-term debt securities issued by the government with a maturity of less than one year, used to finance government spending.

Put Option

A financial contract giving the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a predetermined price within a specific time frame.