The Difference Between the Costs (Or Benefits)created by Both Technological

question 25

Multiple Choice

The difference between the costs (or benefits) created by both technological and pecuniary externalities is that in both cases costs are imposed on _____,but for _____ they are external to the market while _____ are allocated within the market.

• A)parties to the transaction;technological externalities;pecuniary externalities
• B)parties to the transaction;pecuniary externalities;technological externalities
• C)third parties;technological externalities;pecuniary externalities
• D)third parties;pecuniary externalities;technological externalities

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Definitions:

Underlying Security

The asset upon which a derivative contract, such as an option, is based.

Option

A financial derivative that represents a contract giving the buyer the right, but not the obligation, to buy or sell an underlying asset at a specified strike price on or before a specified date.

Employee Stock Options

A right, purchased from one party by another, granting the purchaser the option, but not the requirement, to either buy (call) or sell (put) a share at a pre-decided price during a specific timeframe or on a certain date.