In Option Markets the Price Specified in the Option Contracts

question 79

Multiple Choice

In option markets the price specified in the option contracts for calls and puts is called the:

• A) market price.
• B) option price.
• C) strike price.
• D) expected value.

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Definitions:

Half-Year Convention

A tax and accounting method that treats all assets acquired or disposed of during a year as being acquired or disposed at the midpoint of that year.

Sum-Of-The-Years'-Digits

An accelerated depreciation method that applies a decreasing fraction to the depreciable cost of an asset over its useful life.

Depreciation Expense

An accounting method for allocating the cost of a tangible asset over its useful life, reflecting the asset's decrease in value over time.

Impairment Review

An examination of assets to determine if their carrying value exceeds their recoverable amount, potentially leading to an impairment loss.