Which of the Following Is Not True Concerning Call Option

question 43

Multiple Choice

Which of the following is not true concerning call option writers?

• A)Writers promise to deliver shares if exercised by the buyer.
• B)The writer has the option to sell shares but not an obligation.
• C)The writer's liability is zero if the option expires out-of-the-money.
• D)The writer receives a cash payment from the buyer at the time the option is purchased.
• E)The writer has a loss if the market price rises substantially above the exercise price.

---

Definitions:

Monkeys

Primates that are not apes or humans, typically having tails and less developed brains compared to apes, and are known for their agility and social behaviors.

Trait Theorists

Psychologists who focus on identifying, describing, and measuring individual differences in behavioral predispositions.

Reciprocal Determinism

A concept in psychology that suggests individual behavior and the environment influence each other in a two-way dynamic.

Factor Analysis

A method in statistics that accounts for the differences among observed, correlated variables by reducing them to fewer unknown variables, referred to as factors.