Which of the Following Is Correct

question 20

Multiple Choice

Which of the following is correct?

• A) A diagonal spread can be created by buying a call and selling a put when the strike prices are the same and the times to maturity are different
• B) A diagonal spread can be created by buying a put and selling a call when the strike prices are the same and the times to maturity are different
• C) A diagonal spread can be created by buying a call and selling a call when the strike prices are different and the times to maturity are different
• D) A diagonal spread can be created by buying a call and selling a call when the strike prices are the same and the times to maturity are different

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Definitions:

Book of Original Entry

The first place where financial transactions are recorded, including journals.

Journal Entry

A record in accounting that documents a business transaction, showing the accounts impacted and the amounts debited and credited.

Debit Account

A bookkeeping record that raises the value of an asset or expense, or lowers the value of a liability or equity.

Credit Account

A Credit Account is a type of financial account that records the amounts that are owed by a business to its suppliers or creditors, which are typically settled at a later date.