Which One of the Following Statements Is Correct

question 64

Multiple Choice

Which one of the following statements is correct?

• A)Reduced Value index options are equal in size to one percent of the standard index option.
• B)The holder of a stock index put option is betting that the underlying index will increase in value.
• C)Most index options are traded on the New York Options Exchange.
• D)The contract size for a call option on the S&P 500 is 10 times the index.
• E)Some stock index options close in the morning while others close at the end of the trading day.

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Definitions:

LIFO Inventory

LIFO inventory is a method of inventory valuation where the most recently produced or purchased items are recorded as sold first, potentially reducing taxes in periods of inflation.

Sales Exceed Production

A situation where the demand for a company's products surpasses its current production capacity or available inventory.

Variable Costing

An accounting method that only includes variable costs—costs that vary with production levels—when calculating the cost of producing a good or service.

Net Operating Income

The profit generated from a company’s everyday business operations, calculated by subtracting operating expenses from revenue.