Which of the Following Is True of Services

question 11

Multiple Choice

Which of the following is true of services?

• A) It includes intangible products like medical care.
• B) It includes manufacturing high-quality goods.
• C) It focuses on establishing short-term relationships.
• D) Jobs based on services have been declining in recent years.
• E) Insurance and haircuts are examples of tangible products.

Understand the principles of option pricing and valuation, including factors affecting option value.

Know the expiration and exercise mechanisms for American-style, European-style, and exotic options.

Understand margin requirements for options, their calculation, and implications for traders.

Differentiate between the trading of options on stocks versus futures contracts.

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Definitions:

Marginal Cost

The augmentation in complete expenditure resulting from the manufacture of one more unit of a good or service.

Economies Of Scale

The cost advantages that enterprises obtain due to scale of operation, with cost per unit of output generally decreasing with increasing scale.

Law Of Diminishing Returns

An economic principle stating that adding more of one factor of production, while holding others constant, will at a certain point yield lower incremental per-unit returns.

Economies Of Scale

The financial benefits that businesses achieve because of their size of operation, generally seeing a reduction in cost per unit of output as the scale expands.