The Term Opportunity Cost Applies to a Resource That a Company

question 94

Multiple Choice

The term opportunity cost applies to a resource that a company ________.

• A) is thinking about purchasing
• B) already owns only
• C) has committed to purchase only
• D) already owns or has committed to purchase

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Definitions:

Strike Price

The strike price is a predetermined price at which the holder of an option can buy (call option) or sell (put option) the underlying asset until the expiration date.

Current Price

The present value or selling price of an asset, security, or commodity available in the marketplace.

Put Option

A financial contract that gives the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified time.

Strike Price

The predetermined price at which the buyer of a call option can purchase the underlying asset, or the buyer of a put option can sell the underlying asset.