The Payoffs from Investing in Options Are Designed So That

question 90

Multiple Choice

The payoffs from investing in options are designed so that:

• A) both buyers and sellers can profit.
• B) the seller's (buyer's) gain is the buyer's (seller's) loss.
• C) roughly 20% of sellers and 50% of buyers profit.
• D) few buyers or sellers profit; they buy "insurance."

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Definitions:

Labor Efficiency Variance

The difference between the actual hours worked and the standard hours expected, multiplied by the standard labor rate.

June

The sixth month of the year in the Gregorian calendar.

Variable Overhead Efficiency Variance

The difference between the actual variable overheads incurred and the standard variable overheads expected for the actual production, due to efficiency.

February

The second month of the year in the Gregorian calendar, typically consisting of 28 days, or 29 in leap years.