When options are issued,the amount that must be paid to acquire the shares is referred to as:
A) the current share price.
B) the strike price.
C) the fair value of the share price.
D) net realisable value of the share price.

Question

Quizplus · Accepted Answer

The strike price is the amount that must be paid to acquire the shares when options are issued, as it specifies the price at which the option holder can buy or sell the underlying asset. The current share price may be used as a reference point for the strike price, but it is not the same thing. Fair value and net realizable value are accounting terms and are not typically related to option pricing.

When Options Are Issued,the Amount That Must Be Paid to Acquire