The Option That Is a Combination of a Cap Option

question 47

Multiple Choice

The option that is a combination of a cap option and a floor option is a:

• A) boundary option.
• B) collar option.
• C) band option.
• D) range option.

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Definitions:

Solvency

The ability of a company to meet its long-term financial obligations and continue its operations into the foreseeable future.

Profitability

The ability of a business to generate earnings over its costs and expenses, reflecting its financial health and efficiency.

Working Capital

The difference between a company’s current assets and current liabilities, indicating its short-term financial health and efficiency.

Current Ratio

A liquidity ratio that measures a company’s ability to pay short-term obligations with its current assets.