Selling an Option Is Generally More Valuable Than Exercising the Option

question 42

Multiple Choice

Selling an option is generally more valuable than exercising the option because of the option's:

• A)riskless value.
• B)intrinsic value.
• C)standard deviation.
• D)exercise price.
• E)time premium.

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Definitions:

Perpetual Inventory

An inventory management system where records are continuously updated to reflect sales, purchases, and stock levels in real-time.

Cost Of Goods Sold

The direct costs attributable to the production of goods sold by a company, including materials and labor.

Sale Occurs

The event in which goods or services are transferred from a seller to a buyer for monetary consideration.

Sales Return

Transactions that involve the returning of sold goods by customers, resulting in a reduction of revenue.