The Writer of a Put Option Is Obligated to Provide

question 15

True/False

The writer of a put option is obligated to provide the specified financial instrument at the price specified by the option contract if the owner exercises the option. ​

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Definitions:

Cash Dividend

A direct payment of profits from a company to its shareholders, typically in the form of cash.

Capital Gains Tax

A tax on the profit realized on the sale of a non-inventory asset that was greater than the amount realized on the sale.

Dividends

Payments made to shareholders out of a company's profits, usually on a quarterly basis, representing a portion of the company’s earnings distributed to its stockholders.

Cash

Cash refers to money in the physical form of currency, such as banknotes and coins, which represents immediate value for transactions or reserves.