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:

Total Employment

The total number of people currently employed in the economy, including both full-time and part-time workers.

Productivity

A measure of the efficiency of production, often expressed as the ratio of output to inputs in the production process.

Agriculture

The practice of cultivating land, raising crops, and feeding, breeding, and raising livestock; it is a key component of the food supply chain.

Inelastic

Describes a situation where the demand or supply for a good or service is not significantly altered when the price changes.