Which One of the Following Is Equal to the Option

question 7

Multiple Choice

Which one of the following is equal to the option premium minus the intrinsic value?

• A) parity value
• B) payoff value
• C) time value
• D) strike value
• E) profit

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Definitions:

Vertical Analysis

An approach to financial statement examination where each component within the principal groups of accounts (assets, liabilities, and equity) on a balance sheet is shown as a ratio of the overall category amount.

Total Assets

The sum of all resources owned by an entity, measured in monetary terms, and represented on the balance sheet.

Accounts Receivable Turnover

A financial ratio indicating how quickly a company collects cash from credit sales by measuring the number of times receivables are collected over a period.

Net Sales

Total revenue from sales minus returns, allowances, and discounts.