Suppose an Investor Sells (Writes)a Put Option

question 37

Multiple Choice

Suppose an investor sells (writes) a put option. What will happen if the stock price on the exercise date exceeds the exercise price?

• A)The seller will need to deliver stock to the owner of the option.
• B)The seller will be obliged to buy stock from the owner of the option.
• C)The owner will not exercise the option.
• D)The option will extend for nine more months.

---

Definitions:

Converse

In logic, it refers to reversing the direction of a given implication; in geometry, it involves swapping the hypothesis and conclusion of a statement.

Proposition

In logic, a declarative sentence that is either true or false, serving as the building block for constructing arguments.

Converse

In logic, the converse of a statement is the reversal of its subject and predicate, testing different aspects or implications of the original statement.

Proposition

A declarative sentence or phrase that can be either true or false, expressing a basic statement or assertion.