Apple Computer's Stock Price Jumped When It Announced That Its

question 27

Multiple Choice

Apple computer's stock price jumped when it announced that its revenue had increased because of the successful launch of iPad and the increased sales of Macbook computers.This is an example of

• A)market risk.
• B)unsystematic risk.
• C)systematic risk.
• D)both A and C

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Definitions:

Exercise Price

The predetermined price at which the holder of an option can buy (in the case of a call option) or sell (in the case of a put option) the underlying asset.

Call Option

A financial contract giving the buyer the right, but not the obligation, to purchase a stock or other asset at a specified price within a specified time.

Risk-free Rate

Often considered as the return on government securities, it represents the interest an investor would expect from an absolutely risk-free investment over a specified period.

Put Option

A financial contract that gives the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified period.