The Current Market Price of a Share of a Stock

question 28

Multiple Choice

The current market price of a share of a stock is $20.If a put option on this stock has a strike price of $18,the put

• A)is out of the money.
• B)is in the money.
• C)sells for a higher price than if the strike price of the put option was $23.
• D)A and C.
• E)B and C.

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Definitions:

Establishment of Responsibility

An internal control principle focusing on assigning specific responsibilities to particular employees to reduce errors and fraud.

Segregation of Duties

An internal control measure where no single individual is given too much responsibility in areas of financial reporting, transaction processing, or asset management to prevent fraud and errors.

Documentation Procedures

The methods and practices used for creating, managing, and safeguarding documents within an organization.

Physical Controls

Security measures implemented to protect tangible property, assets, or inventory from damage or unauthorized access.