GENERAL KNOWLEDGE

GK

ACCOUNTING

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
A contract which gives the holder a right to buy a particular asset at a particular rate on or before a specified date is known as
A
Strangle
B
Straddle
C
American Option
D
European Option
Explanation: 

Detailed explanation-1: -Call options are financial contracts that give the option buyer the right, to buy a stock, bond, commodity or other asset or instrument at a specified price within a specific time period.

Detailed explanation-2: -A call option gives you, the buyer, the right, but not the obligation, to buy the underlying asset at a specified strike price before its expiration date. You pay a premium to the seller of the option.

Detailed explanation-3: -An option contract is a financial contract which gives an investor a right to either buy or sell an asset at a predetermined price by a specific date. However, it also entails a right to buy, but not an obligation.

Detailed explanation-4: -A call option is the right to buy an underlying stock at a predetermined price up until a specified expiration date. On the contrary, a put option is the right to sell the underlying stock at a predetermined price until a fixed expiry date.

Detailed explanation-5: -Call options give the holder the right to buy 100 shares of a company at a specific price, known as the strike price (exercise price), up until a specified date, known as the expiration date.

There is 1 question to complete.