If the Exercise Price Is Equal to the Underlying Asset

question 34

Multiple Choice

If the exercise price is equal to the underlying asset price,the option is said to be:

• A) on-the-money
• B) out-of-the-money
• C) in-the-money
• D) none of these options

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Definitions:

ABC Approach

A methodology used in inventory management and cost accounting that prioritizes items based on their importance, cost, or another criterion, often categorized into A, B, and C groups.

Cash Discount

A reduction in the invoice amount by a seller if the buyer pays within a specified period, incentivizing early payment.

Purchases Discount

Purchases Discount represents a reduction in the price of goods a company buys, usually offered by suppliers as an incentive for early payment.

Opportunity Costs

The loss of potential gain from other alternatives when one alternative is chosen.