Writers of Option Contracts

question 126

Multiple Choice

Writers of option contracts

• A) have a limited liability specified in the contract.
• B) hope to exercise the option on favorable terms.
• C) earn a commission no matter what subsequently happens to the contract.
• D) earn a profit when the option expires without being exercised.

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Definitions:

Unstated Belief

An implicit conviction or assumption that influences one's attitudes and behaviors without being directly expressed or acknowledged.

Rational Emotive Behavior Therapy

A form of cognitive-behavioral therapy that identifies and challenges irrational beliefs to alter dysfunctional emotions and behaviors.

Emotional Reaction

An individual's response to a specific stimulus or situation, often involving complex psychological and physiological processes.

Childhood Experiences

The collection of events, interactions, and relationships a person has during their early years of life, influencing their development and personality.