The Minimum Value of a Call Option Equals

question 94

Multiple Choice

The minimum value of a call option equals

• A) exercise price - the stock price.
• B) stock price - exercise price.
• C) call premium - (stock price - exercise price).
• D) put premium - (exercise price - stock price).

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Definitions:

Pre-incorporation Contracts

Agreements entered into on behalf of a corporation that has not yet been legally formed, often leading to questions about enforceability.

Ratification

When the majority agrees with the terms of a collective bargain; when a principal confirms a contract entered into by his agent.

Promoters

Individuals or organizations that undertake the founding and organization of a corporation by arranging for its financing, registration, and public offering.

Fiduciary Duty

A legal obligation of one party to act in the best interest of another. The obligated party is typically a trustee, financial advisor, or lawyer.