18-24.The Purpose of an Option Is

question 19

Multiple Choice

18-24.The purpose of an option is:

• A) to exercise a lease on the property
• B) to be able to purchase the land at a future time
• C) to secure land without securing immediate financing
• D) both b and c

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Definitions:

Security Prices

The current market price or value of a financial security, such as stocks and bonds, determined by supply and demand.

Excess Returns

The return on an investment that exceeds the benchmark or risk-free return, reflecting the additional risk taken by the investor.

Small-company Stocks

Equity investments in companies with smaller market capitalization, often characterized by higher volatility and growth potential compared to large-cap stocks.

Large-company Stocks

Shares of large capitalization companies, often known for their stability and paying dividends.