A Call Option Gives Its Owner the _________ an Asset

question 42

Multiple Choice

A call option gives its owner the _________ an asset at the price within the option period.

• A) right, but not the obligation, to buy
• B) right, but not the obligation, to sell
• C) right to borrow
• D) obligation to buy
• E) obligation to sell

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Definitions:

Period Cost

Costs that are not directly tied to the production process and are expensed in the period in which they are incurred, such as administrative expenses.

Product Cost

The total expense incurred in creating a product, including materials, labor, and overhead costs.

Indirect Cost

Expenses that are not directly attributable to a specific product or service, such as administrative and facility costs.

Direct Cost

Expenses that can be directly traced to the production of a specific good or service, such as materials and labor.