Which of the Following Is Not True Concerning Call Option

question 43

Multiple Choice

Which of the following is not true concerning call option writers?

• A)Writers promise to deliver shares if exercised by the buyer.
• B)The writer has the option to sell shares but not an obligation.
• C)The writer's liability is zero if the option expires out-of-the-money.
• D)The writer receives a cash payment from the buyer at the time the option is purchased.
• E)The writer has a loss if the market price rises substantially above the exercise price.

---

Definitions:

Abnormal Behaviors

These are patterns of emotion, thought, and action considered pathological (outside societal norms) for one or more of several reasons, including rarity, violation of norms, personal distress, or harmfulness.

Social Norm Deviance

The act of behaving in ways that are not in alignment with accepted social practices or standards.

Mental Illness

A broad term for a wide range of mental health conditions that affect mood, thinking, and behavior, often requiring diagnosis and treatment by mental health professionals.

Psychopathology

The study of abnormal behavior and psychological dysfunction.