The time value of the option can best be defined as
A. the fee earned for the potential benefits from buying the option.
B. the commission earned by a broker.
C. the service fee charged by the SEC for regulating the option market.
D. the fee paid for the potential benefits from buying an option (excluding its intrinsic value).
Answer: D
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Over the post-war era, the gaps between countries' living standards
A) disappeared. B) stayed the same. C) increased. D) decreased. E) changed inconsistently.
If there are diseconomies of scale within a given range of output, which of following is(are) TRUE?
A) The short-run average cost curve must be upward sloping within that range of output. B) The long-run average cost curve must be upward sloping within that range of output. C) Long-run average cost must equal short-run average cost. D) All of the above.
Consider the market for ride-on lawn mowers and the recent increases in the price of oil. The recent increase in the price of oil makes it more expensive to manufacture ride-on lawn mowers. An increase in the price of oil also makes it more expensive to run a ride-on mower. What factors of demand and/or supply are affected by the changing price of oil?
A. Price of related good, expectations of future B. Price of related good, price of input C. Price of input, income D. Price of input, number of buyers
Based on economic criteria, a nation should choose a fixed exchange rate if:
A) the monetary authorities are capable of handling shocks. B) the net benefits of fixing versus floating are positive. C) the net benefits of fixing versus floating are negative. D) there is a liberal political agenda that restricts government authority over capital flows.