The Buyer of an Option Contract

question 66

Multiple Choice

The buyer of an option contract:

• A) receives the option premium in exchange for an obligation to either buy or sell an underlying asset.
• B) pays an option premium in exchange for a right to buy or sell an underlying asset during a specified period of time.
• C) pays the strike price at the time the option is purchased and in exchange receives the right to exercise the option at any time during the option period.
• D) receives the option premium in exchange for guaranteeing the purchase or sale of an underlying asset if called upon to do so.
• E) pays the option premium in exchange for receiving the strike price at a later date.

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