A Call Option

question 19

Multiple Choice

A call option

• A)gives the owner of the option the right to buy the underlying asset for a specified price within a specified period of time if the owner wishes to exercise his option.
• B)obligates the owner of the option to buy the underlying asset for a specified price at a specified point in time unless the owner closes out his position.
• C)gives the owner of the option the right to sell the underlying asset at a specified price within a specified period of time if the owner wishes to exercise his option.
• D)obligates the owner of the option to sell the underlying asset for a specified price at a specified point in time unless the owner closes out his position.

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Definitions:

Average Person

A hypothetical individual who represents a standard or norm in behavior, judgment, and values.

Homeowner's Policy

An insurance policy that provides coverage for damages to a homeowner's property, including structures and contents, and often liability for accidents.

Real Property

Land and anything permanently attached to it, such as buildings and fixtures, considered a form of real estate.

Personal Property

Items owned by an individual or entity that are movable and not fixed to real estate, such as furniture, vehicles, and electronics.