Assuming Everything Else Is Constant,if a Stock's Old Price Is

question 3

Multiple Choice

Assuming everything else is constant,if a stock's old price is $40 and the ex-rights or new stock price is $32,then the value of the right is:

• A) -$8.
• B) $8.
• C) impossible to determine without the subscription price.
• D) impossible to determine without the number of rights needed to buy one share.

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Definitions:

Coefficient

In mathematics and statistics, a coefficient is a multiplicative factor in some term of a polynomial, series, or expression; it is usually a number, but in any case does not involve any variables of the series.

Linearly Related

Refers to a correlation between two variables in which a variation in one is linked to a corresponding change in the other.

Interaction Term

In statistical models, a variable created by multiplying two or more variables together to investigate if the effect of one variable on the dependent variable is different at different levels of the other variable.

Coefficient

A numerical constant placed at the beginning and serving as a multiplier to a variable in an algebraic formula.