The Diagram Shows Two Small Paramagnetic Shperes, One near Each

question 48

Multiple Choice

The diagram shows two small paramagnetic shperes, one near each end of a bar magnet. Which of the following statements is true?

• A) The force on 1 is toward the magnet and the force on 2 is away from the magnet
• B) The force on 1 is away from the magnet and the force on 2 is away from the magnet
• C) The forces on 1 and 2 are both toward the magnet
• D) The forces on 1 and 2 are both away from the magnet
• E) The magnet does not exert a force on either sphere

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Definitions:

Exercise Price

The cost at which an option's possessor has the right to acquire (if it's a call option) or divest (if it's a put option) the asset underlying the option.

Call Option

A financial contract that gives the buyer the right, but not the obligation, to buy a specified quantity of an asset at a predetermined price within a specified time frame.

Delta

A measure of how much the price of an option is expected to change based on a $1 change in the underlying asset.

Convertible Bonds

Bonds that can be converted into a predefined amount of the issuing company's equity at certain times during their life, usually at the discretion of the bondholder.