A Sunk Cost

question 124

Multiple Choice

A sunk cost:

• A)is a cost that occurs in the present.
• B)is not categorized as a cost.
• C)is a relevant cost.
• D)is a cost that occurred in the past.
• E)is expected to occur in the future.

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Definitions:

Market Value

The current quoted price at which an asset or company can be bought or sold on the open market.

November 47.50 Call

A call option contract for the right to buy a specific financial instrument at a price of 47.50, expiring in November.

Call

A Call option is a financial contract that gives the option buyer the right, but not the obligation, to buy a stock, bond, commodity, or other asset at a specific price within a specific period.

European Put

A type of option contract that gives the holder the right, but not the obligation, to sell an underlying asset at a specified price on or before a specific date.