A Call Option Can Best Be Defined As

question 47

Multiple Choice

A call option can best be defined as:

• A) An option that gives the owner the right, but not the obligation, to buy an asset.
• B) An option that gives the owner the right, but not the obligation, to sell an asset.
• C) Risk that futures prices will not move directly with cash price hedged.
• D) An agreement by two parties to exchange, or swap, specified cash flows at specified intervals in the future.
• E) An agreement that gives the owner the right, but not the obligation, to buy or sell a specific asset at a specific price for a set period of time.

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Definitions:

British Nationals

Individuals who hold citizenship of the United Kingdom, including those from England, Scotland, Wales, and Northern Ireland, with specific rights and responsibilities under British law.

Handshake

A traditional greeting in which two people grasp and shake each other's hands.

Germans

Refers to the people originating from or associated with the country of Germany.

Handshake

A gesture involving the grasping and shaking of hands, traditionally used to greet someone or seal an agreement.