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Management · Q653

Financial Management

Graduate and Post Graduate · Management · question 653

Q653

In financial planning, formula MAX [current price of stock-strike price, 0] is used to calculate

A.
option return rate
B.
exercise value
Answer
C.
option value
D.
stock value

Answer: Option B

Solution

Answer: Option B
Solution:
In financial planning, formula MAX [current price of stock-strike price, 0] is used to calculate exercise value. The exercise value is the value that an option buyer will get from the option on exercising it.