Figure 2-3 -Refer to Figure 2-3. at Which Point or Points Can

question 30

Multiple Choice

Figure 2-3
-Refer to Figure 2-3. At which point or points can the economy NOT produce?

• A)point A
• B)point C
• C)point A, C
• D)point A, C, D

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Definitions:

Break-Even Price

The price at which total revenues equal total costs, and the business or investor neither makes a profit nor incurs a loss.

Put

An option contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying security at a specified price within a specified time.

Premium

The amount paid for an insurance policy or an amount paid above the nominal value for a security; also, the fees paid for an option contract.

Protective Put

Purchase of an asset combined with a put option on that asset to guarantee proceeds at least equal to the put’s exercise price.