An Option That Grants the Right, but Not the Obligation

question 25

Multiple Choice

An option that grants the right, but not the obligation, to sell shares of the underlying asset on a particular date at a specified price is called:

• A)either an American or a European option.
• B)an American call.
• C)an American put.
• D)a European put.
• E)European call.

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Definitions:

Biosphere

The global ecological system integrating all living beings and their relationships, including their interaction with elements of the lithosphere, hydrosphere, and atmosphere.

Renewable Energy

Energy sources that are replenished naturally and sustainably, such as solar, wind, hydro, geothermal, and biomass, offering an alternative to fossil fuels.

Fossil Fuels

Natural resources such as coal, oil, and natural gas formed from the remains of dead plants and animals, used for energy but contributing to pollution and global warming.

Common Pitfall

A frequently encountered problem or danger that people often fall into, typically arising from a lack of experience or careful thought.