The Right to Sell a Specified Asset at a Specified

question 33

Multiple Choice

The right to sell a specified asset at a specified price up until a specified date is called:

• A) a forward contract
• B) an American-style put option
• C) an American-style call option
• D) a European-style call option
• E) a European style put option

---

Definitions:

Pay Off

To completely repay the outstanding balance of a loan or debt.

Simple Interest

An interest calculation method where the interest charge is based on the original principal amount of a loan or deposit and does not accumulate or compound.

Annum

A term referring to a year, often used in financial contexts to describe periods of time related to investments or contracts.

Variable Interest Rate

An interest rate that can fluctuate over time based on underlying benchmarks or indexes.