Consider a Call Option; in Terms of the Option Writer

question 82

Essay

Consider a call option; in terms of the option writer and option holder, who is the buyer? Who is the seller? Finally, who has the option? Explain.

---

Definitions:

Economic Growth

An increase in a country's output of goods and services over time, often measured by changes in real GDP.

Allocative Inefficiency

A situation where resources are not distributed optimally, resulting in lost potential for producing welfare or value.

Marginal Cost

The cost incurred by producing one more unit of a good or service.

Marginal Benefit

The added utility or joy gained by consuming an extra unit of a product or service.