An Option That Can Be Exercised at Any Time Up

question 85

Multiple Choice

An option that can be exercised at any time up to maturity is called a(n) ________.

• A) swap
• B) stock option
• C) European option
• D) American option

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Definitions:

Absorption Costing

An accounting method that includes all manufacturing costs (direct materials, direct labor, and overhead) in the cost of a product.

Variable Costing

An accounting method that only includes variable production costs—direct materials, direct labor, and variable manufacturing overhead—in product costs, with fixed overhead expenses recorded as period costs.

Inventory

The complete list of items such as property, goods in stock, or the contents of a building.

Absorption Costing

An accounting method that includes all of the costs associated with manufacturing a product in the product's cost.