Which One of the Following Statements Concerning Options Is Correct

question 27

Multiple Choice

Which one of the following statements concerning options is correct?

• A) One option covers 1,000 shares of stock.
• B) A put gives the option holder the right to buy a stated amount of securities.
• C) The owner of a call is entitled to the dividends paid on the underlying shares of stock.
• D) Option holders can profit on movements of the price of the underlying security.

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Definitions:

Group Purchasing

The aggregation of purchasing orders from many buyers so that a volume discount can be obtained.

Aggregate Demand

The total demand for all goods and services within an economy at a given overall price level and in a given time period.

Lower Prices

A strategy or condition where the cost of goods or services is reduced to attract customers or gain a competitive edge in the market.

Stored-value Money

A type of electronic money that is stored on a card or a digital wallet, representing a claim on a predefined amount of currency.