The Price at Which the Holder of an Option Buys

question 81

Multiple Choice

The price at which the holder of an option buys or sells a share of stock when the option is exercised is called the ________ price.

• A) strike
• B) American
• C) dilutive
• D) none of the above

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Definitions:

Market Rate of Interest

The prevailing rate of interest observed in the marketplace for loans and investments.

Trading

Buying and selling securities or commodities in financial markets, aiming for short-term profits.

Effective-Interest Method

A method of calculating the amortized cost of a bond and of interest expense over the bond's life, reflecting a constant rate of interest.