Define a Contract and Explain with Examples

question 62

Essay

Define a contract and explain with examples.

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Definitions:

Variance

A statistical measure of the dispersion or spread between numbers in a data set.

Call Option

A financial contract giving the option buyer the right, but not the obligation, to buy a specified quantity of an asset at a set price within a specified time.

Call Option

A finance-related agreement that allows the buyer the choice, yet not the duty, to purchase an equity, debt instrument, commodity, or another type of asset at an agreed-upon price within a set period.

Expiration

In finance, expiration refers to the date on which a derivative contract (such as options or futures) ceases to exist and settles between the contracting parties.