A Security Is a ________

question 87

Multiple Choice

A security is a ________.

• A) regulation dealing with the transactions of investments
• B) system aimed at protecting the interests of the market participants
• C) share or interest representing financial value
• D) process related to the valuation of a financial instrument

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Definitions:

Convertible Bond

A convertible bond is a type of bond that the holder can convert into a specified number of shares of the issuing company, typically at certain times during its life.

Put Option

A financial contract giving the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specific time.

Option Buyer

An individual or entity that acquires the rights, but not the obligation, to buy or sell an asset at a predetermined price within a specific time frame.

Option Writer

An individual or entity that creates and sells options, thus assuming the risk of having to buy or sell the asset at the option's strike price if the option is exercised.