The Buyer of a Call Option Has the Right to Exercise

question 6

Multiple Choice

The buyer of a call option has the right to exercise the option, but the writer of the call option has the

• A)choice to offset with a put option upon exercise.
• B)obligation to deliver the shares at the exercise price.
• C)choice to deliver shares or take a cash payoff.
• D)obligation to deliver a put option upon exercise.

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Definitions:

Business Cycle

The progression of economic activity through expansion, peak, contraction, and trough phases.

Business Cycle

The natural fluctuation of the economy between periods of expansion (growth) and contraction (recession).

Market Basket

A collection of goods and services used to track inflation, consumer spending, or the cost of living in a specific area.

CPI

Consumer Price Index, a measure that examines the weighted average of prices of a basket of consumer goods and services, used to estimate inflation.