Question

You own stock in a firm that has a pure discount loan due in six months. The loan has a face value of $50,000. The assets of the firm are currently worth $62,000. The stockholders in this firm basically own a _____ option on the assets of the firm with a strike price of:______ put;

$62,000. put; $50,000. warrant; $62,000. call; $62,000. call; $50,000.

Answer 1

The stockholders in this firm basically own a call option and the assets of the firm with a stake price of $50,000

Explanation:

The financial contract between the two parties and the options between the buyer and the seller and the buyer have the rights but not the obligation to buy any required product is called as the call in the stock market

The changes that affect the commodity price will be the the base asset price the volatility and the time decay the strike price is usually the starting price of the commodity