Xavier Owns a Duplex That He Leases to Yvon and Zack

question 7

Multiple Choice

Xavier owns a duplex that he leases to Yvon and Zack. Xavier may sell

• A) the duplex at any time.
• B) the duplex, but only after the lease expires and the tenants move out.
• C) the duplex, but only with the tenants' permission.
• D) the lease, but not the duplex.

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Definitions:

Call Option

An agreement that allows the purchaser the option, without being required, to buy a specific asset like a stock, bond, or commodity, at an agreed-upon price within a set timeframe.

Exercise Price

The specified price at which the option holder can buy (call option) or sell (put option) the underlying asset.

Call Option Contracts

Financial agreements giving the buyer the right but not the obligation to purchase an asset at a specified price within a certain period.

Underlying Stock

The specific stock that represents the equity interest in which options, futures, or other derivatives contracts are based on.