When a Stock Index Option Is Exercised, the Cash Payment

question 50

Multiple Choice

When a stock index option is exercised, the cash payment is equal to a specified dollar amount

• A) multiplied by the index level.
• B) multiplied by the exercise price.
• C) multiplied by the difference between the index level and the exercise price.
• D) multiplied by the sum of the index level and the exercise price.

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Definitions:

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