Which One of the Following Obligates You Only on the Expiration

question 14

Multiple Choice

Which one of the following obligates you only on the expiration date to sell an asset at the strike price if the option is exercised?

• A)American call
• B)American put
• C)European call
• D)European put
• E)European swap

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Definitions:

Resources

Assets or items of value owned by a company or individual, which can be used to produce goods, provide services, or generate income.

Corporation

A legal entity recognized by law that is separate from its owners, with the ability to own assets, incur liabilities, and sell shares to investors.

Assets

Resources owned or controlled by a business, expected to produce economic value or benefits in the future.

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life, reflecting wear and tear, obsolescence, or decline in value.