What Is an Option

question 12

Multiple Choice

What is an option?

• A)A contract that gives the holder the right to sell an instrument at a pre-specified price.
• B)A contract that is derived from some other underlying quantity,index,asset or event.
• C)A contract that gives the holder the right to acquire an instrument at a pre-specified price.
• D)A contract that gives the holder the right to buy or sell something at a specified price.

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Definitions:

Domain-Specific Memory

Memory that applies to a particular area of knowledge or expertise, allowing for better recall of information related to that field.

Problem Representation

The process of mentally framing or defining a problem in a way that will facilitate the search for solutions.

Analogy

A comparison between two things, typically for the purpose of explanation or clarification.

Retrieval Cue

A stimulus, whether external or internal, that helps in the recall or recognition of memory stored information.