An Option Is

question 152

Multiple Choice

An option is:

• A) The right to buy or sell a commodity at a fixed price
• B) The right to buy a commodity at a fixed price
• C) The right but not the obligation to buy or sell a commodity at a fixed price
• D) The right but not the obligation to buy a commodity at a fixed price

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Definitions:

Standard Deviation

Standard Deviation is a statistical measurement that represents the degree of variation or dispersion from the average, often used to quantify the risk of investment returns.

Market Call Premium

Additional amount above the par value that an investor must pay to call in a callable bond before its maturity date.

Stock Price Volatility

Refers to the degree of variation of a trading price series over time as measured by the standard deviation of logarithmic returns.

Call Option

A financial contract that gives the buyer the right, but not the obligation, to buy a stock or other underlying asset at a predetermined price within a specified time period.