If Your _____, Your Net Worth on the Balance Sheet

question 28

Multiple Choice

If your _____, your net worth on the balance sheet will increase from one period to the next.

• A) liabilities increase and assets remain constant
• B) liabilities increase and assets decrease
• C) assets increase and liabilities remain constant
• D) income and liabilities decrease
• E) liabilities and expenses increase

---

Definitions:

Delta

A measure in options trading that indicates how the price of an option is expected to change relative to a one-unit change in the price of the underlying asset.

Put Option

A financial contract that gives the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a predetermined price within a fixed period of time.

Binomial OPM

A mathematical model used to price options, considering multiple potential outcomes and the time value of money.

Exercise Price

The predetermined price at which an option contract can be executed, determining the cost to buy (call) or sell (put) the underlying asset.