You Own 700 Shares of ZZ Industries Stock Which You

question 89

Multiple Choice

You own 700 shares of ZZ Industries stock which you purchased for $36.60 a share.You would like to have the right to sell your shares for $32.50 a share.What will be the cost to obtain this right?

• A)$0.40
• B)$0.90
• C)$7.00
• D)$396.00
• E)$900.00

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Definitions:

Moral Hazard

The situation where one party can take risks because they know that they will not bear the consequences of their actions, often seen in situations where individuals or institutions are protected by insurance or other safety nets.

Insurance

A contract represented by a policy in which an individual or entity receives financial protection or reimbursement against losses from an insurance company.

Avoiding Insured Risk

Strategies or actions taken to minimize exposure to risks that are typically covered by insurance policies.