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The Writer of a Call Option Is Obligated to Sell

question 136

True/False

The writer of a call option is obligated to sell the underlying currency to the buyer of the option if the option is exercised.


Definitions:

Face Value

The face value or the amount in dollars shown on a bond, note, or any financial instrument, representing its value upon reaching maturity.

Current Yield

A financial ratio that calculates the annual interest or dividends received from an investment as a percentage of the current market price.

Coupon

The face value percentage that represents the yearly interest payment on a bond.

Semiannually

Occurring or conducted twice a year; typically refers to payments, reports, or evaluations made every six months.

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