Which One of the Following Provides the Option of Selling

question 40

Multiple Choice

Which one of the following provides the option of selling a stock anytime during the option period at a specified price even if the market price of the stock declines to zero?

• A)American call
• B)European call
• C)American put
• D)European put
• E)either an American or a European put

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Definitions:

Accrued Revenues

Assets (receivables) created when revenues are earned, but cash will be collected from customers in the future; created at end of period during the adjustment process to reflect the amount of revenue earned by providing goods or services over time to customers who will pay in the future.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, representing the owners' claim on the company assets.

Assets

Resources owned by a company from which future economic benefits are expected to flow to the company.

Deferred Expenses

Assets created when purchased in the past before being used to generate revenues; need to be adjusted at the end of the period to reflect the amount of expense incurred by using the assets over time.