The Writer of a Call Option Has the Obligation

question 111

Multiple Choice

The writer of a call option has the obligation:

• A) but not the right to sell an asset at a predetermined price.
• B) but not the right to buy an asset at a predetermined price.
• C) and the right to sell an asset at a predetermined price.
• D) and the right to buy an asset at a predetermined price.

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Definitions:

Inventory

The raw materials, work-in-process products, and finished goods that are considered to be the portion of a business's assets that are ready or will be ready for sale.

Aggressive Revenue Recognition

A practice where a company prematurely or improperly records revenue to make its financial performance appear better.

Receivables Management

Practices and procedures used to manage amounts owed to a business by its customers, enhancing cash flow.

Note Disclosures

Additional information provided in financial reports that complements and clarifies the main financial statements, often detailing accounting policies and methodologies.