Which Two of the Following Are Key Differences Between an Option

question 20

Multiple Choice

Which two of the following are key differences between an option contract and a forward contract?
I.option contracts can be resold but forward contracts cannot
II.the option price is determined at settlement while the forward price is determined when the contract is initiated
III.the rights and obligations of the buyer
IV.cost when contract initiated

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

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