Considering a Put Option, an Increase in the Strike Price

question 57

Multiple Choice

Considering a put option, an increase in the strike price:

• A)Causes the intrinsic value of the option to decrease.
• B)Causes the intrinsic value of the option to increase.
• C)Causes the value of the option to decrease.
• D)Makes the option worthless.

Differentiate between English auctions and sealed-bid second-price (Vickrey) auctions.

Assess the impact of bidder valuations and probabilities on auction outcomes.

Apply rational bidding strategies to predict auction outcomes in theory.

Understand the various methods and options for contraception.

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Definitions:

Rent Controls

Government-imposed maximums on the rent that landlords can charge tenants.

Price Ceiling

A legally imposed maximum price on a good or service, usually set below the equilibrium price to keep the goods affordable for consumers.

Equilibrium Price

The cost at which the amount of a product or service being sought matches the amount available, resulting in a stable market.

Price Ceiling

A government-imposed limit on how high the price of a product can be charged in the market to protect consumers from excessive prices.