The Creation of the CBOE Led to All the Following

question 111

Multiple Choice

The creation of the CBOE led to all the following innovations in options EXCEPT

• A) the creation of a central marketplace.
• B) the introduction of a clearing corporation.
• C) the standardization of expiration dates.
• D) the creation of a primary market.
• E) the creation of a secondary market.

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Definitions:

Retained Earnings

The portion of a company's profit kept in the business after dividends are paid, which can be used for reinvestment in operations, debt reduction, or other purposes.

Component Cost Of Preferred Stock

The required rate of return by investors on a company's preferred stock, essentially the cost to the company of issuing preferred stock.

Dividend Yield

The financial ratio that shows how much a company pays out in dividends each year relative to its stock price.

After-Tax Cost Of Debt

The net cost to a company for borrowing funds, calculated by subtracting the tax savings from the cost of debt's interest payments.