23-53 the Writer of a Bond Call Option

question 77

Multiple Choice

23-53 The writer of a bond call option

• A)receives a premium and must stand ready to sell the bond at the exercise price.
• B)receives a premium and must stand ready to buy bonds at the exercise price.
• C)pays a premium and has the right to sell the underlying bond at the agreed exercise price.
• D)pays a premium and has the right to buy the underlying bond at the agreed exercise price.
• E)pays a premium and has the obligation to buy the underlying bond at the agreed exercise price.

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Definitions:

Pleura

A double-layered membrane surrounding the lungs and lining the chest cavity, facilitating lung movement and serving as a protective layer.

Serous Membrane

A serous membrane is a thin layer of tissue that lines certain internal cavities of the body, secreting a serous fluid that lubricates and reduces friction between organs.

Serous Fluid

A clear, thin fluid that lubricates the surfaces between two membranes, reducing friction from muscle movement.

Reduce Friction

A method or process of decreasing resistance between two objects or surfaces in contact, often to improve efficiency or prevent wear.