The Holder of an Option Contract

question 128

Multiple Choice

The holder of an option contract:

• A)has purchased it from the seller by paying the exercise price
• B)is known as the 'short' position
• C)has the obligation to settle the contract
• D)can choose to buy or sell the contract item on the exercise date
• E)will exercise the option contract at expiry if it is advantageous for them to do so.

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Definitions:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.