Which Is the Best Definition of a Call Option

question 106

Multiple Choice

Which is the best definition of a call option?

• A)The right to buy an asset at a fixed price during a particular time period.
• B)The right to sell an asset at a fixed price during a particular time period.
• C)A security that gives the holder the right to purchase shares of a stock at a fixed price over a period of time.
• D)The act of buying or selling the underlying asset via the option contract.

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Definitions:

Income Statement

A financial report that shows the company’s revenues and expenses over a specific period, resulting in net profit or loss.

August 31

A specific calendar date, often marking the end of a month or a deadline for certain financial or administrative tasks.

Net Income

The profit a company holds onto after subtracting expenses and taxes from its accumulated revenues.

Common Stock

A type of equity security that represents ownership in a corporation, providing voting rights and a residual claim on corporate earnings and assets.