Which of the Following Statements Is True Regarding the Writer

question 58

Multiple Choice

Which of the following statements is true regarding the writer of a call contract?

• A) The call writer expects the stock to move upward.
• B) The call writer expects the stock to remain the same or move down.
• C) The call writer expects the stock to split.
• D) The call writer expects to sell the stock prior to expiration of the option.

---

Definitions:

Present Value

The current worth of a future sum of money or stream of cash flows, given a specified rate of return.

M.B.A. Programs

Master of Business Administration programs, offering advanced education in business management and operations.

Nominal Interest Rate

The stated interest rate of a loan or investment without adjusting for inflation.

Real Rate

The interest rate that has been adjusted for inflation, reflecting the true cost of borrowing or the true yield on an investment.