Considering a put option, an increase in the strike price:
A. causes the intrinsic value of the option to increase if it is above zero.
B. makes the option worthless.
C. causes the intrinsic value of the option to decrease if it is above zero.
D. causes the value of the option to decrease.
Answer: A
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The union would have a better bargaining position in the negotiations if
a. The firm can hire individual workers at a lower wage b. The union has low wage workers who cannot afford to be off work c. The union has a strike fund to pay workers during work stoppage actions d. The firm can easily replace workers with machinery
A consumer has $1,000 a week to spend on renting square feet of housing x1 (at a price of $5 per square foot) and eating out meals x2 (at a price of $20 per meal). Derive the budget line equation and find the opportunity cost of housing in terms of meals in your equation.
What will be an ideal response?
The consumption function will shift with
A) a decrease in real disposable income. B) a change in saving. C) a change in household wealth. D) an increase in real disposable income.
A noisy monopoly
A) will be regulated by the Federal Trade Commission until it reduces its noise emissions. B) sells products under its own label for a low price, and sells the virtually identical product with the same quality under a private label for a higher price. C) sells products under its own label for a high price, and sells the virtually identical product with the same quality under a private label for a lower price. D) leverages the Lemon Law to sell both good and poor quality goods for the same price.