At Expiration, the Writer of a Stock Index Call Option

question 50

Multiple Choice

At expiration, the writer of a stock index call option that was written at the money will be required to:

• A) deliver the underlying stocks in the index if the index value moves up.
• B) deliver the underlying stocks in the index if the index value moves down.
• C) deliver a cash value if the index value moves up.
• D) deliver a cash value if the index value moves down.

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Definitions:

Gestalt Principle

A psychological theory suggesting that individuals perceive objects as whole systems rather than the sum of their parts.

Proximity

The state or condition of being close or near; in psychology, it often refers to how physically close people are to each other, which can influence relationships and social interactions.

Gestalt Psychology

A theory of mind that emphasizes the human ability to perceive patterns and wholes in complex data rather than just individual components.

Psychophysics

The branch of psychology that deals with the relationships between physical stimuli and the sensory perceptions they evoke.