A Share of Stock Is a ________ Option on the Value

question 74

Multiple Choice

A share of stock is a ________ option on the value of assets of the firm with a strike price equal to ________.

• A)put option,face value of debt
• B)call option,market value of equity
• C)call option,face value of debt
• D)put option market value of equity

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Definitions:

Subconscious

A part of the mind not fully aware but influences one's actions and feelings.

Catharsis

The process of releasing, and thereby providing relief from, strong or repressed emotions.

Repression

Defense mechanism in which the ego pushes anxiety-provoking material back into the unconscious.

Unconscious

The part of the mind that is inaccessible to the conscious mind but that affects behavior and emotions.