As a Security, Options Are Best Described by Which of the Following

question 68

Multiple Choice

As a security, options are best described by which of the following?

• A) They have a very long maturity.
• B) They can be a risky purchase for investors.
• C) They do not legally obligate the holder to buy or sell.
• D) They are not similar to futures contracts.

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Definitions:

Investment

The act of distributing funds or resources with the aim of earning an income or profit.

GDP Deflator

A financial indicator that adjusts the value of output calculated at present prices to constant-dollar GDP, to correct for inflation effects.

Real GDP

The measure of a country's economic output adjusted for price changes (inflation or deflation), providing a more accurate reflection of an economy's size and how it's growing over time.

GDP Deflator

An indicator showing the price levels for all newly created, final goods and services produced within a country's borders.