As an Option Approaches Its Expiration Date, the Value of the Option

question 30

Multiple Choice

As an option approaches its expiration date, the value of the option approaches:

• A)The intrinsic value.
• B)The price of the underlying asset.
• C)Zero.
• D)Infinity.

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Definitions:

Inventory Inspection Costs

Expenses associated with the verification and checking of goods in inventory for quality and quantity control.

Income Statement

A financial statement that shows a company’s revenues and expenses over a specific period, culminating in the net income or loss for the period.

FIFO Inventory Method

An inventory valuation method where the cost of the items purchased first is the first to be recognized in determining cost of goods sold.