Use the Figure for the Question(s)below

question 48

Multiple Choice

Use the figure for the question(s) below.
-This graph depicts the payoffs of a

• A)a long position in a put option at expiration.
• B)short position in a call option at expiration.
• C)a short position in a put option at expiration.
• D)a long position in a call option at expiration.

---

Definitions:

Cash Flow

The total amount of money being transferred into and out of a business, particularly in terms of liquidity and financial planning.

Cash Discount

A reduction in the invoice price offered by sellers to encourage early payment by buyers.

Carrying Costs

Expenses incurred for holding inventory over a period, which can include financial costs, storage fees, and loss due to obsolescence.

Default Rate

The percentage of borrowers failing to make payments on their loans within a specific period.