The Value of an Option If It Were to Immediately

question 94

Multiple Choice

The value of an option if it were to immediately expire,that is,its lower pricing bound,is called an option's ________ value.

• A)strike
• B)market
• C)volatility
• D)time
• E)intrinsic

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Definitions:

Competitive Firms

Businesses operating in a market where they compete with others for customers, each with minimal influence over market prices.

Monopolies

Market situations in which a single supplier dominates the supply of a good or service, with no close substitutes.

Demand Curve

An illustrated chart depicting the correlation between a product's price and the amount of it consumers want to buy at that price level.

Marginal Cost

The spending necessary to produce an extra unit of a product or service.