You Buy One Hewlett Packard August 50 Call Contract and One

question 60

Multiple Choice

You buy one Hewlett Packard August 50 call contract and one Hewlett Packard August 50 put contract.The call premium is $1.25 and the put premium is $4.50.Your highest potential loss from this position is _________.

• A) $125
• B) $450
• C) $575
• D) unlimited

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Definitions:

Machine Capacity

The maximum amount of work that a machine or plant can produce in a given period, usually measured in units of output.

Aggregate Planning

A marketing activity that does an aggregate plan for the production process, in advance of 6 to 18 months, to give an idea to management as to what quantity of materials and other resources are to be procured and when.

Overtime

Additional hours worked beyond the standard work schedule, usually compensated at a higher rate.

Subcontracting

The practice of assigning specific tasks, projects, or production processes to external firms to leverage specialized capabilities or manage capacity.