Julian Has Purchased a Derivative That Will Allow Him to Purchase

question 9

Multiple Choice

Julian has purchased a derivative that will allow him to purchase a security at a specific price.The seller of the derivative has allowed Julian to purchase the security or let the derivative expire without being exercised for a certain premium.Julian intends to purchase the security only if the underlying security's price goes above the strike price.Which of the following kinds of derivative does Julian hold?

• A)Forwards
• B)Swaps
• C)Options
• D)Futures

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Definitions:

Coefficient Of Correlation

An index that measures the magnitude and direction of a straight-line association between two variables.

Coefficient Of Correlation

An analytical tool that evaluates the strength of the association between the relative shifts of two variables.

Independent Variables

Independent variables are the factors in an experiment that are manipulated or changed by the researcher to investigate their effects on the dependent variables.

Distribution

The way in which something is shared or spread out over an area or among a population.