The Seller of an American Call Has The

question 436

Multiple Choice

The seller of an American call has the:

• A) Right, but not the obligation, to buy an asset at the strike price on or before the expiration date.
• B) Right, but not the obligation, to buy an asset only on the expiration date.
• C) Right, if they so choose, to sell an asset at the strike price on or before the expiration date.
• D) Obligation to sell an asset on or before the expiration date, if the buyer exercises the option.
• E) Obligation to sell an asset at the strike price on the expiration date.

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Definitions:

Promise to Donate

A commitment made by an individual or entity to give a gift, often monetary, to a nonprofit or charitable organization.

Illusory

Pertaining to something that is deceptive, misleading, or not based on reality; often used to describe agreements that lack a firm commitment.

Right to Cancel

A legal entitlement allowing a party to terminate an agreement or contract within a specific time frame.

Promisee Promises

Commitments or assurances made by the promisee (receiver of the promise) within a contractual agreement.