Which of the Following Correctly Identifies the Impact of These

question 32

Multiple Choice

Which of the following correctly identifies the impact of these changes on a put option of Tele-Tech Com?

• A)Both changes cause the price of the put option to decrease.
• B)Both changes cause the price of the put option to increase.
• C)The greater uncertainty will cause the price of the put option to decrease.The higher price of the stock will cause the price of the put option to increase.
• D)The greater uncertainty will cause the price of the put option to increase.The higher price of the stock will cause the price of the put option to decrease.
• E)The greater uncertainty has no direct effect on the price of the put option.The higher price of the stock will cause the price of the put option to decrease.

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Definitions:

Provincial Tax Brackets

The divisions at which income is taxed at different rates within a province, depending on the level of the taxpayer's income.

Tax Difference

Refers to the disparity between tax rates, obligations, or benefits under different tax systems or scenarios, affecting investment decisions and financial planning.

Retained Earnings

The portion of a company's profits that is kept or retained and not paid out to shareholders as dividends. These funds are often reinvested in the business.

Net Capital Spending

The total spending on fixed assets minus the proceeds from the sale of fixed assets over a period.