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:

Recording Process

The systematic method of capturing and documenting financial transactions in the accounting records of an organization.

Journal

A detailed record where all financial transactions of a business are initially recorded, serving as the primary source of accounting data.

Ledger Accounts

Financial records that provide a detailed account of all the transactions related to a particular item over a period.

Journal

A book or electronic record where all transactions are recorded in chronological order.