The Option Writer Is

question 60

Multiple Choice

The option writer is:

• A) the seller of an option.
• B) the buyer of an option.
• C) the underlying asset of the option.
• D) the individual who obtains the rights.

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Definitions:

Term Structure

The relationship between interest rates or bond yields and different terms or maturities, depicted in a curve.

Maturity Date

The specific date on which the principal or final payment of a debt instrument is due to be paid to the investors or lenders.

Nominal Rate

The interest rate stated on a bond or loan agreement without adjustment for inflation.

Current Yield

A bond's annual interest payment divided by its current price, indicating the return an investor would expect if the bond is held for a year.