The Writer of a Call Option Is Obligated to Sell

question 136

True/False

The writer of a call option is obligated to sell the underlying currency to the buyer of the option if the option is exercised.

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Definitions:

Economic Profits

The difference between a firm's total revenues and its total costs, including both explicit and implicit costs, often indicating a firm's efficiency.

Corn Market

The trading and economic sector focused on the cultivation, distribution, and sale of corn as a commodity.

Market Supply

The total amount of a specific good or service that is available to consumers in a market at current prices.

Increasing-cost Industry

An increasing-cost industry is one in which the entry of new firms raises the average costs of production, often due to limited resources or increasing prices for inputs.