Which of the Following Option Traders Receive,rather Than Pay,a Premium

question 107

Multiple Choice

Which of the following option traders receive,rather than pay,a premium?

• A) Option sellers
• B) Option buyers
• C) Both option sellers and buyers
• D) Neither buyers nor sellers receive premiums

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Definitions:

Consumer Surplus

Consumer surplus is the difference between the total amount consumers are willing and able to pay for a good or service and the total amount they actually pay.

Property Rights

The legal rights to own, use, and dispose of assets including real estate, personal possessions, and intellectual property.

Producer Surplus

The difference between what producers are willing and able to sell a product for and the actual price they receive, representing the extra benefit to producers.

Consumer Surplus

The difference between the total amount that consumers are willing to pay for a good or service and the total amount they actually pay.