What Type of Option Will an Option Buyer Buy If

question 80

Multiple Choice

What type of option will an option buyer buy if they believe a share price will fall?

• A) Call
• B) Put
• C) Warrant
• D) Swaption

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Definitions:

Beginning of Year

The starting point of a calendar year or fiscal year used for accounting and other chronological purposes.

Extract

To remove or take out something, often using effort or force, particularly from a complex mixture or compound.

Firm Represented

Describes a scenario in which a type of business entity is depicted or acted on behalf of, in various contexts.

Optimal Extraction Level

The point at which the marginal cost of extracting a resource (e.g., minerals, oil) equals the marginal revenue, ensuring the most efficient allocation of resources.