Allman,Inc

question 6

Multiple Choice

Allman,Inc. ,enters into a call option contract with Betts Investment Co.on January 2,2014.This contract gives Allman the option to purchase 1,000 shares of Upmann stock at $100 per share.The option expires on April 30,2014.Upmann shares are trading at $100 per share on January 2,2014,at which time Allman pays $200 for the call option.
-Using the information above,the 1,000 shares of Upmann stock in this contract is referred to as the

• A) collateral.
• B) notional amount.
• C) option premium.
• D) derivative.

---

Definitions:

Speaker Attributes

Characteristics or qualities of a speaker that influence how the message is received, such as credibility, attractiveness, and authority.

Balance Theory

A psychological theory suggesting how people develop their relationships with others and objects in their environment based on cognitive consistency among triads of elements.

Unit Relation

The interconnectedness or interaction between different components or elements within a system.

Sentiment Relation

The association and connection between feelings or attitudes and how they influence behaviors or perceptions.