ECONOMICS
FINANCIAL MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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the obligation but not the right to sell an asset at a predetermined price over some time period.
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the obligation but not the right to buy an asset at a predetermined price over some time period.
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the right but not the obligation to sell an asset at a predetermined price over some time period.
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the right but not the obligation to buy an asset at a predetermined price over some time period.
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none of the above.
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Detailed explanation-1: -Call options are financial contracts that give the option buyer the right but not the obligation to buy a stock, bond, commodity, or other asset or instrument at a specified price within a specific time period. The stock, bond, or commodity is called the underlying asset.
Detailed explanation-2: -Call options contracts give holders the right, but not the obligation, to buy some underlying security at a pre-determined price by a set expiration time. Unlike futures or forwards, this means that the call holder can decide whether or not to exercise that right and purchase the asset for that strike price.
Detailed explanation-3: -Call options are financial contracts that give the option holder the right, but not the obligation, to buy a stock, bond, commodity or other asset or instrument at a specified price within a specific time period.
Detailed explanation-4: -What are call options? A call option is a contract between a buyer and a seller to purchase a certain stock at a certain price up until a defined expiration date. The buyer of a call has the right, not the obligation, to exercise the call and purchase the stocks.
Detailed explanation-5: -1. Call Option: It is a contract that gives the buyer the right and obligation to buy the underlying asset at the strike price at any time up to the expiration date. Example-A stock call option with a strike price of 20 means the option buyer can use the option to buy that stock at $20 before the option expires.