The Price That the Writer of a Call Option Receives

question 3

Multiple Choice

The price that the writer of a call option receives for the underlying asset if the buyer executes her option is called the

• A)strike price
• B)exercise price
• C)execution price
• D)A or B
• E)A or C

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Definitions:

Primary Election

A preliminary election where voters decide their party’s candidates for a forthcoming general election.

Expected Number

The anticipated value in a probability distribution, representing the mean of a random variable.

Binomial Distribution

A probability distribution that summarizes the likelihood of a variable, which has only two possible outcomes, across a number of trials.

Normal Approximation

An approach in statistics for estimating the probability of different outcomes under the assumption that the data follow a normal distribution.