A Put Option Provides an Options Holder

question 114

Multiple Choice

A put option provides an options holder

• A) the obligation to buy foreign currency at a specific price.
• B) the obligation to sell foreign currency at a specific price.
• C) the right to buy foreign currency at a specific price.
• D) the right to sell foreign currency at a specific price.

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Definitions:

Financial Leverage

The action of using debt to magnify the expected return on an investment.

Operating Income

Income from a company's main business activities, excluding deductions for interest and taxes, showing the profitability from core operations.

ROE

Return On Equity, a measure of financial performance calculated by dividing net income by shareholders' equity, indicating how efficiently a company uses investments to generate earnings growth.

EPS

Earnings per share, a company's net profit divided by the number of its outstanding shares, indicating profitability.