One of the Key Differences Between an Option Contract and a Futures

question 63

True/False

One of the key differences between an option contract and a futures contract is that the long position taker in an option contract must pay some amount of money to obtain the option.

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Definitions:

Book Value

The net value of a company's assets minus its liabilities, as recorded on the balance sheet.

Poison Pill

A defensive strategy used by corporations to deter hostile takeovers by making the company less attractive to the potential acquirer.

Control

In a business context, the ability to direct the management and policies of a company, often through the ownership of a majority of shares.

Shareholders

Individuals or entities that own one or more shares of stock in a corporation, thus having partial ownership and interest in the company.