Which of the following statements is CORRECT?
A. An option's value is determined by its exercise value, which is the market price of the stock less its strike price. Thus, an option can't sell for more than its exercise value.
B. As a stock's price increases, the premium portion of an option on that stock increases because the difference between the stock price and the fixed strike price increases.
C. If the company is consistently profitable, its call options will always be in the money.
D. The market value of an option depends in part on the option's length of time until expiration and on the variability of the underlying stock's price.
E. The potential loss on an option decreases as the option sells at higher and higher prices because the profit margin becomes larger.
Answer: D
You might also like to view...
To determine the ________, marketers need to know the total advertising costs and the total number of purchases made
A) bounce rate B) conversion rate C) cost per order D) clickthrough rate E) market share
According to McLaughlin, movement across the C.O.R.E Continuum is accompanied by increasing organizational ______.
A. reliability B. reputation C. credibility D. integration
Of the abilities below, which is NOT fundamental to effective writing?
A) to think before writing B) to draft and redraft till you have a polished, finished product C) to write your material to appeal to all audiences D) to write tightly
Growing labor pools are found in
A. Japan. B. many developing countries. C. developed countries such as Sweden, Russia, and Germany. D. countries with low levels of immigration.