Which One of the Following Is True for the Owner

question 12

Multiple Choice

Which one of the following is true for the owner of a call option?

• A) The loss potential is unlimited.
• B) The profit potential is unlimited.
• C) The option price exceeds the exercise price.
• D) There is no expiration date, unless the option is a European call.

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Definitions:

Increase

An upward movement in quantity, size, value, or some other measure, indicating growth or escalation.

Local Market

A market in which goods and services are bought and sold within a specific geographic area, often reflecting the preferences and characteristics of the local population.

Supply Curve

The supply curve is a graphical representation showing the relationship between the price of a good and the quantity of the good that producers are willing and able to supply at various prices.

Commodity Increases

Refers to a rise in the quantity supplied or demanded of a good or service, often due to factors like price changes, improvements in technology, or shifts in consumer preferences.