Which of the Following Statements Is Correct

question 6

Multiple Choice

Which of the following statements is correct?

• A) The writer (seller) of a call option on shares receives a fee from the buyer of the option
• B) The writer (seller) of a call option on shares may or may not have to sell the shares to the buyer of the option
• C) The writer (seller) of a call option on shares has an obligation to sell the shares at a future time to the buyer of the option
• D) All of the above are correct

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Definitions:

Standard Price

A predetermined cost that companies use to budget and evaluate the performance of actual costs.

Standard Quantity

The established amount of materials or inputs expected to be used in the production of a good or service.

Total Manufacturing Cost Variance

The difference between total standard costs and total actual costs for the units produced.

Standard Costs

Predetermined costs for the manufacturing of products or services, used as target costs or bases for variance analysis.