A Put Gives the Owner the Right

question 36

Multiple Choice

A put gives the owner the right:

• A) and the obligation to buy an asset at a given price.
• B) and the obligation to sell an asset at a given price.
• C) but not the obligation to buy an asset at a given price.
• D) but not the obligation to sell an asset at a given price.

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Definitions:

Debt Ratio

A financial ratio that measures the extent of a company's leverage, calculated by dividing total liabilities by total assets.

Profit Margin

Profit margin is a financial metric that measures the percentage of profit a company retains after subtracting its costs from its revenue, reflecting the overall profitability of the business.

Equity Multiplier

A financial ratio indicating how much of a company's assets are financed by stockholder's equity, illustrating the degree of financial leverage used.

Times-Interest-Earned (TIE) Ratio

Determined by dividing earnings before interest and taxes by the interest charges. This ratio measures the extent to which operating income can decline before the firm is unable to meet its annual interest costs.