A Call Option on a Stock Is a Financial Instrument

question 90

Multiple Choice

A call option on a stock is a financial instrument defined by which of the following statements?

• A) It obligates the investor holding it to sell the stock at the specified price at the stated date in the future.
• B) It obligates the investor holding it to buy the stock at the specified price at the stated date in the future.
• C) It gives the investor holding it the right, but not the obligation, to buy the stock at the specified price at the stated date in the future.
• D) It gives the investor holding it the right, but not the obligation, to sell the stock at the specified price at the stated date in the future.

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Definitions:

Phenomenological Approach

A qualitative research approach that aims to describe and understand individuals' lived experiences and the meanings they attach to them, emphasizing subjective perspectives.

Conscious Experience

Refers to the awareness of one's own thoughts, feelings, and perceptions in the present moment.

Free Will

The concept or belief that humans have the capacity to choose or act upon their own volition without being controlled by fate or divine intervention.

Cognitive Theories

Theories in psychology that emphasize internal mental processes as the key to understanding human behavior, including how we process information, solve problems, and make decisions.