As Compensation for the Risk of an Option Writer, the Option

question 53

Multiple Choice

As compensation for the risk of an option writer, the option purchaser will pay

• A) a commission.
• B) a cash dividend.
• C) an intrinsic value.
• D) a premium.

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Definitions:

Neutrons

Subatomic particles found within the nucleus of an atom, having no electric charge and a mass slightly larger than that of protons.

Atomic Number

The number of protons in the nucleus of an atom, which determines the chemical properties of an element and its place in the periodic table.

Mass Number

The total number of protons and neutrons in the nucleus of an atom, representing the atom's mass.

Electronegativity

A chemical property that describes the tendency of an atom to attract a shared pair of electrons towards itself in a covalent bond.