Which of the Following Statements Is True of the Holder

question 36

Multiple Choice

Which of the following statements is true of the holder of a call option?

• A) Option holders pay no income taxes.
• B) Holders of a call option have restricted profits.
• C) Option holders do not receive dividends
• D) Investors in call options do not have to exercise them and therefore cannot sustain losses.

---

Definitions:

Net Operating Income

The profit generated from a company's core business operations, excluding expenses and revenues from non-operating activities.

Net Operating Income

A measure of a company's or property's profitability after subtracting all operating expenses from the revenue generated from operations.

Planning Budget

is a financial plan developed based on projected activity levels and expected revenues and expenses, providing a framework for future operations.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity, allowing for more accurate financial planning and analysis.