Cazden Motors' stock is trading at $30 a share. Call options on the company's stock are also available, some with a strike price of $25 and some with a strike price of $35. Both options expire in three months. Which of the following best describes the value of these options?
A. The options with the $25 strike price will sell for less than the options with the $35 strike price.
B. The options with the $25 strike price have an exercise value greater than $5.
C. The options with the $35 strike price have an exercise value greater than $0.
D. If Cazden's stock price rose by $5, the exercise value of the options with the $25 strike price would also increase by $5.
E. The options with the $25 strike price will sell for $5.
Answer: D
You might also like to view...
Which one of the following is not an example of a typical review program?
a. Interoffice reviews. b. Engagement quality review. c. Peer reviews. d. Self reviews.
In REA, resources are assets that include accounts receivable
Indicate whether the statement is true or false
What is cost of goods sold?
Describe the flow of this cost through the job order costing system. Your answer should include the accounts involved and whether the flow involves a debit or credit.
Panasonic markets a line of digital cameras that use Leica lenses. Leica lenses are legendary for their superb image quality. Panasonic is known for its consumer electronics
What marketing strategy are Panasonic and Leica implementing? Support your answer.