A Call Option Grants Its Owner Which One of the Following

question 17

Multiple Choice

A call option grants its owner which one of the following?

• A)right to buy
• B)obligation to buy
• C)right to sell
• D)obligation to sell
• E)choice to either buy or sell

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Definitions:

Net Present Value

The variance between cash inflows and outflows' present value over time, utilized to evaluate an investment's profitability.

Working Capital

The gap between a firm's present assets and liabilities, showing how liquid it is in the short run.

Investment Project

An investment project represents a series of cash inflows and outflows aimed at generating a return over time, typically involving the purchase of assets or investment in ventures.

Discount Rate

In DCF evaluations, the applied rate to ascertain the contemporary value of expected future cash inflows.