Under What Circumstance Will the Buyer of a Put Option

question 38

Multiple Choice

Under what circumstance will the buyer of a put option be asked to perform her obligation?

• A) When the stock price has declined below the strike price.
• B) When the stock price has increased above the strike price.
• C) The put buyer has an equal obligation regardless of the relationship between stock and strike prices.
• D) The put buyer has no obligation whatsoever.

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Definitions:

Basis of Bargain

The fundamental assumptions or agreements that form the underlying basis for a contract or transaction.

Furlong v. Alpha Chi Omega

A specific legal case or controversy, but without further detail, its significance cannot be determined. If it's a real case, it would be related to a legal dispute involving the parties named.

Shipment Contract

A legal agreement specifying that the seller will bear the risk of loss or damage to the goods until they are delivered to the carrier.

Ex-Ship

A term from international trade indicating that the seller's responsibility ends once the goods are available for unloading from the ship at the destination port.