Which of the Following Statements Is True

question 42

Multiple Choice

Which of the following statements is true?

• A) Call options are issued by corporations and bought by investors.
• B) Call options are issued by investors and bought by corporations.
• C) Call options are issued by investors and bought by investors.
• D) Put options are issued by corporations and bought by investors.

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Definitions:

Target Net Profit

A financial objective set by a business indicating the desired bottom-line income after all expenses, interest, and taxes have been deducted from total revenues.

Degree of Operating Leverage

A measure of how much a company's operating income changes in response to a change in sales volume, indicating the level of fixed versus variable costs.

Contribution Margin

The amount remaining from sales revenue after all variable expenses have been deducted, indicating the ability to cover fixed costs and generate profit.

Total Contribution Margin

The difference between total sales revenue and total variable costs, measuring how much revenue covers fixed costs and profits.