The Writer of an Option Keeps the Option Premium Regardless

question 40

True/False

The writer of an option keeps the option premium regardless of whether or not the option is ever exercised.

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Definitions:

Civil Law Suit

A legal action initiated by one party against another for the enforcement or protection of a private right or for compensation for a wrong in areas governed by civil law.

Counterclaim

A claim made to offset another claim in a legal action, essentially a defendant’s claim against the plaintiff.

Examination for Discovery

A pre-trial process where parties in a lawsuit have the opportunity to question each other or witnesses under oath.

Balance of Probabilities

The standard of proof in most civil cases, requiring that a party's case is more likely true than not.