There's a Call Option Written for 100 Shares of GM

question 41

Multiple Choice

There's a call option written for 100 shares of GM stock for $85.00 a share, prior to the third Friday of October 2006: The option writer:

• A)Has the requirement to sell 100 shares of GM for $85 a share on or before the third Friday of October 2006 if the option holder wants to exercise the option.
• B)Has the option to sell 100 shares of GM for $85 a share on or before the third Friday of October 2006.
• C)Can cancel the option before the third Friday of October 2006.
• D)Does not have to post margin while the option holder does.

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Definitions:

Van der Waals Interaction

A type of weak interaction between molecules due to transient electric dipole moments, influencing molecular structure and function.

Ionic Bond

A type of chemical bond formed through the electrical force between oppositely charged ions.

Calorie

A unit of energy often used to quantify the amount of energy food provides to the human body.

Van der Waals Interaction

A weak force of attraction between molecules or parts of molecules that results from transient fluctuating electrical charges.