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:

Labor for Leisure

The trade-off between working hours for income and spending time on relaxation or enjoyment activities.

Hourly Wage Rate

The hourly wage rate is the amount of money paid to an employee for one hour of work, often used to calculate overall earnings in jobs that compensate workers on an hourly basis.

Extra Hour

An additional period of time, typically beyond what is normal or expected, often referring to work or activities.

Price of Leisure

The opportunity cost of leisure, represented by the wages foregone by choosing leisure time over work time.