Which One of the Following Statements Concerning Call Option Writers

question 83

Multiple Choice

Which one of the following statements concerning call option writers is true?

• A)Call option writers promise to purchase shares if the call option is exercised.
• B)The call option writer has the option,but not the obligation,to purchase shares if the option is exercised.
• C)The call option writer is betting that the market price of the underlying asset will increase.
• D)The call option writer receives a cash payment when the option is written.
• E)The call option writer earns a profit when an in-the-money option is exercised.

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Definitions:

The Other America

A term often associated with discussions on economic and social inequality, highlighting the disparities in living conditions and opportunities between different segments of society.

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The state or condition in which a person or community lacks the financial resources and essentials for a minimum standard of living.

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A curve that shows the maximum possible output combinations of two goods or services that an economy can achieve when all its resources are used efficiently.

Great Depression

A severe worldwide economic downturn that took place during the 1930s, characterized by high unemployment, deflation, and a collapse in demand and investment.