An Option Seller Can Avoid a Loss by Choosing Not

question 68

True/False

An option seller can avoid a loss by choosing not to exercise the option.

---

Definitions:

Maker

In the context of negotiable instruments, the individual or entity that creates and signs the promissory note, committing to pay the specified sum.

Note

A legal document that represents a type of debt or an obligation to pay an amount of money at a future date.

Cashier's Check

A check issued by a bank, drawn on its own funds rather than the account of a private individual, offering a high level of guarantee of payment.

Bank

A banking entity authorized to accept deposits, extend credit, and offer diverse financial services to both private individuals and commercial entities.