The Writer of a Call Option Has

question 11

Multiple Choice

The writer of a call option has:

• A)the obligation to sell a security for a given price.
• B)the obligation to buy a security for a given price.
• C)the right to sell a security for a given price.
• D)the right to buy a security for a given price.

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Definitions:

Full Employment

An economic situation in which all available labor resources are being used in the most efficient way possible, essentially meaning that unemployment is at the lowest possible level without causing inflation.

Aggregate Supply Curve

A graphical representation that shows the total amount of goods and services that producers in an economy are willing and able to supply at different price levels over a period.

Downward Rigidity

A circumstance in which wages or prices are resistant to decrease even in conditions where economic theory suggests they should fall.

Recessions

A temporary downturn in the economy marked by decreased trade and industrial production, typically recognized by a decrease in Gross Domestic Product (GDP) for two consecutive quarters.