At expiration, the value of an option:
A. is equal to the intrinsic value.
B. is less than the intrinsic value.
C. is equal to the time value of the option.
D. is greater than the intrinsic value.
Answer: A
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At the end of the future period, in the real intertemporal model with investment
A) the firm's capital becomes useless and is thrown away. B) the firm's capital is used to produce more capital for the distant future. C) the firm can convert capital one-for-one into consumption goods. D) the firm's capital is converted into labor.
Assume both the marginal cost and the average variable cost curves are U-shaped. At the minimum point on the AVC curve, marginal cost must be: a. greater than the average variable cost. b. less than the average variable cost
c. equal to the average variable cost. d. at its minimum.