Which of the Following Statements Best Describes Options

question 12

Multiple Choice

Which of the following statements best describes options?

• A)An option's value is determined by its exercise value, which is the market price of the stock less its striking price. Thus, an option can't sell for more than its exercise value.
• B)As the stock's price rises, the time value portion of an option on a stock increases because the difference between the price of the stock and the fixed strike price increases.
• C)The market value of an option depends in part on the option's time to maturity and also on the variability of the underlying stock's price.
• D)The potential loss on an option decreases as the option sells at higher and higher prices because the profit margin gets bigger.

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Definitions:

Criminal Justice System

The network of courts, law enforcement, and correctional institutions involved in the enforcement of laws and the punishment of offenders.

Ethical Pluralism

The acceptance that multiple ethical systems or theories can coexist and may all offer valuable insights into moral dilemmas.

Ethical Relativism

The belief that morality is relative to the norms of one's culture and that there are no universal moral principles applicable to all cultures.

Moral Absolutes

Ethical beliefs that certain actions are universally right or wrong, regardless of the context or situation.