A Call Option Contract

question 48

Multiple Choice

A call option contract:

• A) obligates both the buyer and the seller.
• B) obligates the buyer but not the seller.
• C) grants rights to the buyer and obligates the seller.
• D) grants rights to the seller and obligates the buyer.
• E) grants rights to both the buyer and the seller but does not obligate either party.

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Definitions:

Vertex

In the context of geometry and graph theory, a vertex is a point where two or more curves, edges, or lines meet. In the context of quadratic functions, it is the highest or lowest point of the parabola.

Intercepts

Points where a graph crosses the axes of a coordinate system, typically identified as x-intercepts (where the graph crosses the x-axis) and y-intercepts (where it crosses the y-axis).

Parabola

A symmetric curve formed by all the points at an equal distance from a point called the focus and a line called the directrix.

Upward

In a direction towards a higher position or level.