A Deep In-The-Money Call Option on Futures Is Exercised Early

question 19

Multiple Choice

A deep in-the-money call option on futures is exercised early because

• A)the intrinsic value is maximized
• B)it behaves like a futures but ties up funds
• C)the futures price is not likely to rise any further
• D)all of the above
• E)none of the above

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Definitions:

Telephone Expense

This represents the cost associated with telephone usage and services for a business, classified as an office expense.

Fees Earned

Fees earned refer to the income a company receives from providing services to its clients, typically recorded in the income statement.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, culminating in net profit or loss.

Statement Of Owner's Equity

A financial document that shows the changes in the equity of a company over a specific period, reflecting investments, withdrawals, and the net income or loss.