When You Graph the Relationship Between Performance and Span of Control

question 18

Multiple Choice

When you graph the relationship between performance and span of control, the resulting diagram shows ______.

• A)an "arch" shape
• B)a "U' shape
• C)a straight horizontal line
• D)a straight vertical line
• E)a diagonal line sloping up to the right

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Definitions:

Exercise Price

The cost at which an option's possessor has the right to purchase (for a call option) or dispose of (for a put option) the base security or commodity.

Margin Requirements

The minimum amount of equity that must be maintained in a margin account to hold an investment position, set by brokerage firms or regulatory bodies.

Option Positions

Refers to the holdings an investor has in options contracts, which could be either calls (betting the stock will rise) or puts (betting the stock will fall).

In The Money

A term used in options trading to describe an option that would generate profit if exercised immediately, because the underlying asset's price is favorable to the option's strike price.