Select all that are true with respect to options discussed in this module: Group of answer choices Option “moneyness” is sometimes called the “intrinsic value” of the option. A European Option can be exercised any time up to and including the date of maturity, but American Option can be exercised only at the date of maturity. The option “writer” is essentially the original seller of the option. While the option owner has the right, but not the obligation, to exercise an option, the option writer is obligated to follow through on the other side of the transaction if the option owner chooses to exercise. The option premium (option “value”) is made up of the intrinsic value and “speculative” value or time value.
Select all that are true with respect to options discussed in this module: Group of answer choices Option “moneyness” is sometimes called the “intrinsic value” of the option. A European Option can be exercised any time up to and including the date of maturity, but American Option can be exercised only at the date of maturity. The option “writer” is essentially the original seller of the option. While the option owner has the right, but not the obligation, to exercise an option, the option writer is obligated to follow through on the other side of the transaction if the option owner chooses to exercise. The option premium (option “value”) is made up of the intrinsic value and “speculative” value or time value.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Select all that are true with respect to options discussed in this module:
Group of answer choices
Option “moneyness” is sometimes called the “intrinsic value” of the option.
A European Option can be exercised any time up to and including the date of maturity, but American Option can be exercised only at the date of maturity.
The option “writer” is essentially the original seller of the option.
While the option owner has the right, but not the obligation, to exercise an option, the option writer is obligated to follow through on the other side of the transaction if the option owner chooses to exercise.
The option premium (option “value”) is made up of the intrinsic value and “speculative” value or time value.
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