The Liability Coverage of a Homeowner Policy

question 7

Multiple Choice

The liability coverage of a homeowner policy

• A) applies to the insured premises.
• B) provides protection away from the premises.
• C) both a and b.
• D) neither a nor b.

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Definitions:

Exercise Price

The set price at which an option's owner has the right to purchase (for a call option) or sell (for a put option) the underlying asset or commodity.

Call Option

A financial contract that gives the buyer the right, but not the obligation, to buy an asset at a specified price within a specific time period.

Delta

In finance, typically refers to the ratio comparing the change in the price of an asset, usually a derivative, to the change in the price of its underlying asset.

Time Value

The concept that money available now is worth more than the same amount in the future due to its potential earning capacity.