BUISENESS MANAGEMENT
RISK MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Provide the buyer with a buy/sell option
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Provide the buyer with a buy/sell option, but no obligation to buy/sell the collateral at the end of the contract
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Providing the buyer with a buy/sell option, the contract buyer must buy/sell the collateral at the end of the contract
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None of the above
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Detailed explanation-1: -Call options are those contracts that give the buyer the right, but not the obligation to buy the underlying shares or index in the futures. They are exactly opposite of Put options, which give you the right to sell in the future.
Detailed explanation-2: -An option contract is an agreement used to facilitate a possible transaction between two parties. It governs the right to buy or sell an underlying asset or security, such as a stock, at a specific price.
Detailed explanation-3: -A put option gives you the right, but not the obligation, to sell a stock at a specific price (known as the strike price) by a specific time – at the option’s expiration.
Detailed explanation-4: -An option is a contract which gives. holder right to buy or sell (but not. obligation) of underlying asset at a. fixed price within a specified period. of time.
Detailed explanation-5: -An option is a derivative, a contract that gives the buyer the right, but not the obligation, to buy or sell the underlying asset by a certain date (expiration date) at a specified price (strike price). There are two types of options: calls and puts.