In an Option Contract, the Writer of the Option Grants

question 28

Multiple Choice

In an option contract, the writer of the option grants the buyer of the option the ________, but not the ________, to purchase from or sell to the writer something at a specified price within a specified period of time (or at a specified date) .

• A) obligation; right
• B) obligation; privilege
• C) right; obligation
• D) right; privilege

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Definitions:

Convergent Validity

The extent to which two measurements of constructs, which are expected to have a theoretical correlation, actually do exhibit a relationship.

Reactivity

The alteration of the behavior of study participants due to their awareness of being observed.

Interval Scale

A type of scale used in measurements that expresses the order of variables and also establishes a defined distance between variables, but lacks a true zero point.

Ordinal Scale

A scale of measurement where objects or individuals are categorized based on some order or ranking, without information on the magnitude of differences.