In financial planning, most high option price will lead to__________?
Correct answer: A. Longer option period
- A. Longer option period
- B. Smaller option period
- C. Lesser price
- D. Higher price
Explanation
A longer time until expiration generally raises an option's price because it gives more opportunity for the underlying asset to move favourably. Thus, a higher option price is associated with a longer option period in this context.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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