A Call Option Provides an Options Holder

question 108

Multiple Choice

A call option provides an options holder

• A) the obligation to buy foreign currency at a specific price.
• B) the obligation to sell foreign currency at a specific price.
• C) the right to buy foreign currency at a specific price.
• D) the right to sell foreign currency at a specific price.

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Definitions:

Detectable Difference

The minimum change in a stimulus that can be correctly identified as different from a reference stimulus a certain proportion of the time.

Ernst Weber

A pioneering psychologist best known for his work in the sensory perception field, including Weber's Law regarding the just-noticeable difference in stimuli.

Sensation

The process through which the senses pick up visual, auditory, and other sensory stimuli and transmit them to the brain.

Perception

The method through which people arrange and understand their sensory perceptions to assign significance to the world around them.