What Is the Difference Between a Call Option and a Put

question 112

Essay

What is the difference between a call option and a put option?

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Definitions:

Loanable Funds

The total funds available for borrowing in the economy, coming from savings, that are used for investments and consumption.

Interest Rate

The fraction of a loan incurred as interest by the borrower, often depicted as an annual percentage of the outstanding loan amount.

Capital Flight

The rapid movement of large sums of money out of a country, typically to escape economic instability or unfavorable investment conditions.

Domestic Investment

The total capital expenditure within a country's borders on physical assets such as buildings, machinery, and equipment, contributing to the national economy.