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:

Price Mechanism

The system by which the prices of goods and services are determined in a free market, based on the principles of supply and demand.

Central Planning Agency

An organization responsible for directing economic activity according to a comprehensive plan, often in a centrally planned economy.

Business Firms

Entities that engage in commercial, industrial, or professional activities with the goal of generating profits for their owners or shareholders.

Equity

Ownership interest in a corporation in the form of common stock or preferred stock, representing a claim on its earnings and assets.