Which of the Following Is True of Options

question 14

Multiple Choice

Which of the following is true of options?

• A)The option writer pays money to the holder to acquire the option.
• B)If the exercise price exceeds future share price,the put writer will sell the underlying for more than it is worth.
• C)Future cash flows are never positive when writing an option.
• D)If the future share price exceeds exercise price,the call writer will buy the underlying for less than its fair value.

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Definitions:

Respiratory Distress Syndrome

A medical condition primarily affecting premature infants characterized by difficulty breathing due to insufficient surfactant in the lungs.

Hyaline Membrane Disease

A respiratory disorder primarily in premature infants, characterized by difficulty breathing due to the formation of a glassy membrane in the lungs.

Down Syndrome

A genetic disorder caused by the presence of all or part of a third copy of chromosome 21, characterized by physical growth delays, characteristic facial features, and varying degrees of intellectual disability.

Developmental Lag

A delay in the acquisition of skills or knowledge, typically in comparison to normative developmental milestones.