Saving Equals

question 58

Multiple Choice

Saving equals:

• A)current spending minus current income.
• B)wealth minus assets.
• C)assets minus liabilities.
• D)current income minus spending on current needs.

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Definitions:

Time Premium

The difference between intrinsic value and the option price.

Call Option

A financial contract that gives the purchaser the right, but not the obligation, to buy an asset at a predetermined price before or at the expiration date.

Put Option

A financial contract giving the option holder the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified time.

Call Option

A financial contract giving the buyer the right, but not the obligation, to buy a stock, bond, commodity, or other asset or instrument at a specified price within a specific time period.