Which of the following describes a short call option?O The obligation to buy an asset for a certain priceThe right to sell an asset for a certain priceO The right to buy an asset for a certain priceThe obligation to sell an asset for a certain price

Concept. In options contract, The buyer of the call option has the right and not obligation to buy…

Which of the following describes a short call option? O The obligation to buy an asset for a certain price O The right to sell an asset for a certain price O The right to buy an asset for a certain price O The obligation to sell an asset for a certain price

Which of the following describes a short call option? O The obligation to buy an asset for a certain price O The right to sell an asset for a certain price O The right to buy an asset for a certain price O The obligation to sell an asset for a certain price

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter14: Security Structures And Determining Enterprise Values

Section: Chapter Questions

Problem 15DQ

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Question

Which of the following describes a short call option?
O The obligation to buy an asset for a certain price
The right to sell an asset for a certain price
O The right to buy an asset for a certain price
The obligation to sell an asset for a certain price

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Which of the following describes a short put option? The obligation to sell an asset for a certain price The obligation to buy an asset for a certain price O The right to sell an asset for a certain price The right to buy an asset for a certain price
The seller of an option contract has the to buy or sell the underlying asset while the buyer of an option contract has the to buy or sell the underlying asset. O O O A right; obligation B с D obligation; right right; right obligation; obligation
A call option holder has an obligation to sell the asset. True or false?
Which of the following best describes an option contract? a. It gives the holder the obligation to buy or sell an underlying asset at a prespecified price for a specified time period. b. It gives the holder the right, but not the obligation, to buy or sell an underlying asset at a prespecified price for an unspecified time period. c. It gives the holder the right, but not the obligation, to buy or sell an underlying asset at a prespecified price for a specified time period. d. It gives the holder the right, but not the obligation, to buy or sell an underlying asset at an unspecified price for an unspecified time period.
Which of the following gives the holder the right to sell the asset at a specified strike price? OA. A stock OB. A put OC. An ETF OD. A future contract OE. A call
What is an option? OA) A contract that is derived from some other underlying quantity, index, asset or event. B) A contract that gives the holder the right to buy or sell something at a specified price. C) A contract that gives the holder the right to sell an instrument at a pre- specified price. D) A contract that gives the holder the right to acquire an instrument at a pre- specified price.
Which of the following gives the holder the right to buy the asset at a specified strike price? OA. A future contract OB. A put OC. An ETF OD. A stock OE. A call
A call option: Choose the right answer: a. is the right to buy at the strike price on or before a certain date. b. is the option to sell at the strike price on or before a certain date. c. requires the holder to buy the asset. d. requires the holder to sell the asset.
For a call option, the: * A. buyer is locked into receive the underlying asset at a specified time. B. writer is committed to handing over the specified asset if the holder of the call exercises the option. C. writer may choose whether or not to deliver the underlying asset at a specified time. D. buyer will choose to exercise the option only if the price of the underlying asset falls
Question 11 Complete the following: Purchasing a call option gives you A The right to buy an asset at the market price B The right to sell an asset at a specified price C The right to sell an asset at the market price D The right to buy an asset at a specified price
The price that the buyer of a call option pays for the underlying asset if she executes her option is called the A. premium B. exercise price C. execution price D. calling price
The seller (or the writer) of a call option: may have the obligation to sell the underlying asset at a strike price until an expiration date may have the obligation to buy the underlying asset at a strike price until an expiration date has the right to sell the underlying asset at a strike price until an expiration date has the right to buy the underlying asset at a strike price until an expiration date None of these answers are correct.