The Buyer of an Option Contract

question 66

Multiple Choice

The buyer of an option contract:

• A) receives the option premium in exchange for an obligation to either buy or sell an underlying asset.
• B) pays an option premium in exchange for a right to buy or sell an underlying asset during a specified period of time.
• C) pays the strike price at the time the option is purchased and in exchange receives the right to exercise the option at any time during the option period.
• D) receives the option premium in exchange for guaranteeing the purchase or sale of an underlying asset if called upon to do so.
• E) pays the option premium in exchange for receiving the strike price at a later date.

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Definitions:

British North America

Term referring to the British colonies and territories in North America, including Canada, during the period from the 16th century until 1783, when Britain recognized American independence.

Immigrants

People who have moved to a new country with the intention of settling there, often in search of better living conditions, employment, or safety.

Liberties

The absence of constrictive control by governing bodies on an individual’s lifestyle, behaviors, or political perspectives in a societal setting.

Anglicization

The process of adopting English culture, language, or norms, often in the context of colonized societies integrating with or being influenced by English settlers or governance.