Which of the Following Grants Its Owner the Right to Purchase

question 106

Multiple Choice

Which of the following grants its owner the right to purchase an asset at a stated price?
I.American call
II.European call
III.American put
IV.European put

• A)I only
• B)I and II only
• C)I and III only
• D)II and IV only
• E)III and IV only

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Definitions:

Common Stock

Common stock represents ownership shares in a corporation, giving holders voting rights and a share in the company's profits through dividends.

Par Value

The face value of a bond or stock as stated by the issuing company, unrelated to its market value.

Transaction Fee

A charge levied for processing a payment or financial transaction.

Shares

Units of ownership interest in a corporation or financial asset that provide for an equal distribution in any profits, if any are declared, in the form of dividends.