Which of the Following Statements Is CORRECT

question 2

Multiple Choice

Which of the following statements is CORRECT?

• A)Put options give investors the right to buy a stock at a certain strike price before a specified date.
• B)Call options give investors the right to sell a stock at a certain strike price before a specified date.
• C)Options typically sell for less than their exercise value.
• D)LEAPS are very short-term options that were created relatively recently and now trade in the market.
• E)An option holder is not entitled to receive dividends unless he or she exercises their option before the stock goes ex dividend.

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Definitions:

Binder Agreement

A temporary or preliminary agreement that outlines the terms of a more formal agreement to be made later.

Temporary Insurance Coverage

Short-term insurance protection provided to the insured during a specific period or while waiting for permanent insurance to become effective.

Insurance Coverage

The amount and type of protection provided under an insurance policy against financial loss or liability.

Insurance Clauses

Provisions within an insurance policy that outline the rights, duties, and coverages provided to the insured.