Suppose an Investor Sells a Put Option Over XYZ Shares

question 45

Multiple Choice

Suppose an investor sells a put option over XYZ shares.What will happen if the share price on the exercise date exceeds the exercise price?

• A)The seller will need to deliver XYZ shares to the owner of the option.
• B)The seller will be obliged to buy shares from the owner of the option.
• C)The option owner will not exercise his/her option.
• D)The seller can sell XYZ shares for the exercise price.
• E)None of these.

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Definitions:

Temporal Lobes

Regions of the cerebral cortex located beneath the temples, important for processing auditory information and for memory and speech.

Sense of Hearing

The ability to perceive sound by detecting vibrations through the ear.

Parietal Lobe

The part of the brain located behind the frontal lobe, responsible for processing sensory information regarding the location of parts of the body as well as interpreting visual information and processing language and mathematics.

Art Museum

A public or private institution that collects, conserves, and exhibits works of art for education, study, and enjoyment of the public.