If You Buy an Option to Buy Treasury Futures at 110,and

question 7

Multiple Choice

If you buy an option to buy Treasury futures at 110,and at expiration the market price is 115,

• A) the call will be exercised.
• B) the put will be exercised.
• C) the call will not be exercised.
• D) the put will not be exercised.

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Definitions:

Direct Labor Hours

The total amount of time, measured in hours, that workers spend directly manufacturing goods or providing services.

Standard Hours

Refers to the set amount of time expected to perform a specific task or produce a specific quantity of goods.

Direct Labor Rate Variance

The difference between the actual cost of direct labor and the expected (or standard) cost, used in manufacturing cost analysis.

Actual Costs

The real costs incurred in the production of goods or services, as opposed to estimated or forecasted costs.