Which One of the Following Is a True Statement

question 35

Multiple Choice

Which one of the following is a true statement?

• A)The union wage advantage is smaller if fringe benefits are included
• B)The union wage advantage is greater if fringe benefits are included
• C)Inclusion of fringe benefits has no measurable impact on the union wage advantage
• D)Because fringe benefit levels are prescribed by law,the impact of these benefits on the union wage advantage is negligible

---

Definitions:

Exercise Price

The predetermined price at which the holder of an option can buy (in the case of a call option) or sell (in the case of a put option) the underlying asset.

Call Option

A financial contract giving the buyer the right, but not the obligation, to purchase a stock or other asset at a specified price within a specified time.

Risk-free Rate

Often considered as the return on government securities, it represents the interest an investor would expect from an absolutely risk-free investment over a specified period.

Put Option

A financial contract that gives the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified period.