Specific Identification Is an Inventory Costing Method Used to Value

question 54

True/False

Specific identification is an inventory costing method used to value inventory where the merchandise identified as sold or on hand is typically a high-priced or one-of-a-kind item.

---

Definitions:

Exercised

Refers to the act of implementing the rights granted by a financial contract, commonly in options trading where a buyer may execute the option.

Hedge Ratios

Financial ratios used to calculate the optimal amount of exposure needed to hedge (protect against risk) a position or portfolio.

Long Calls

An option strategy involving the purchase of call options, giving the buyer the right, but not the obligation, to purchase a security at a specified price within a certain time frame.

Delta

In finance, a measure of the sensitivity of an option's price to a change in the price of the underlying asset, indicating how much the price of the option is expected to move based on a $1 change in the underlying asset.