The Value of an Option Is Dependent Upon the Value

question 73

Multiple Choice

The value of an option is dependent upon the value of the underlying security.This relationship defines an option as which one of the following?

• A) equity security
• B) fixed income security
• C) derivative security
• D) transfer security
• E) dependent security

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Definitions:

Federal Government

The national government of the United States, created by the Constitution, that encompasses a system of governmental institutions and practices.

Emancipation Proclamation

A presidential decree by Abraham Lincoln in 1863, declaring the freedom of all enslaved persons in Confederate-held territory during the American Civil War.

Unconstitutional

Actions or laws that are not in accordance with the constitution and therefore illegal and invalid.

Commander-in-chief

The highest-ranking officer of a nation's military forces, or the supreme authority over a country's armed forces; in the United States, it is the President.