The Writer of a Bond Call Option

question 75

Multiple Choice

The writer of a bond call option

• A)receives a premium and must stand ready to sell the bond at the exercise price.
• B)receives a premium and must stand ready to buy bonds at the exercise price.
• C)pays a premium and has the right to sell the underlying bond at the agreed exercise price.
• D)pays a premium and has the right to buy the underlying bond at the agreed exercise price.
• E)pays a premium and has the obligation to buy the underlying bond at the agreed exercise price.

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Definitions:

Comparative Advantage

The proficiency of an individual, enterprise, or nation in producing a good or service at a lower opportunity cost than that of its competitors.

Programs

A set of activities with the intention of achieving specific objectives, often within a scheduled timeframe.

Sunglasses

Eyewear designed to protect the eyes from the sun's harmful ultraviolet rays and reduce glare.

Absolute Advantage

The ability of a country, individual, company, or region to produce a good or service at a lower cost per unit than the cost at which any other entity produces that good or service.