When the time to maturity increases with all else remaining the same, which of the following is true?
A. European options always increase in value
B. The value of European options either stays the same or increases
C. There is no effect on European option values
D. European options are liable to increase or decrease in value
D
When the time to maturity increases from X to Y, European options usually increase in value. But this is not always the case. For example, European call options can decrease in value if a big dividend is expected between X and Y.
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George and Virginia have an annuity that will provide benefits for George's life and then continue to provide the same amount of benefits to Virginia as his survivor. What type of annuity did George set up?
A) Joint life annuity B) Temporary annuity certain C) Life annuity with period certain D) Joint life and survivorship annuity
Describe the principal-agent relationship with respect to checks
What will be an ideal response?