A put option gives the holder the right to buy something the right to sell something...

Question

Question

Answer 1

Answer #1

A buyer of a put option gives the right but not the obligation to sell something.

A buyer of a call option gives the right but not the obligation to buy something.

A seller of a put option has the obligation to buy something.

A seller of a call option has the obligation to sell something.

Using the above facts the correct answer is option of A put option gives the holder the right to sell something.

Feel free to ask in case of any query relating to this question

Answer 2

Similar Homework Help Questions

A derivative instrument that gives the holder the right but not the obligation to buy the...

A derivative instrument that gives the holder the right but not the obligation to buy the underlying asset at a specified price before or on a specified date is called a/an_______ Call option.Forward. Swap Put option Commodity futures.
questions 21-24 please 21. The writer of a put option A. Agrees to sell shares at...

questions 21-24 please 21. The writer of a put option A. Agrees to sell shares at a set price if the option holder desires B. Agrees to buy shares at a set price if the option holder desires C. Has the right to buy shares at a set price D. Has the right to sell shares at a set price E. None of the above 22. Advantages of exchange-traded options over Over-The-Counter options include all but which one of the...
An investor who purchases a put option: a. Has the obligation to buy a given stock...

An investor who purchases a put option: a. Has the obligation to buy a given stock at a specified price during a designated time period. b. Has the obligation to sell a given stock at a specified price during a designated time period. c. Has the right to buy a given stock at a specified price during a designated time period. d. Has the right to sell a given stock at a specified price during a designated time period. e....

27. The writer (seller) of a put option a. agrees to sell shares at a set...

27. The writer (seller) of a put option a. agrees to sell shares at a set price if the option holder desires b. agrees to buy shares at a set price if the option holder desires c. has the right to buy shares at a set price d. has the right to spl shares at a set price 17. A call option is said to be "in-the-money" if a. the stock price (i.e. the underlying asset) is greater than the...
A single put option contract may give a holder the right to sell 1 share of...

A single put option contract may give a holder the right to sell 1 share of XYZ stock at a strike price of $100/share at the expiry date in 1 year. The borrowing/lending rate is 5%. Suppose that the current stock price is 95 and 1 year later, the stock price is either $80 or $110. Calculate this option price, round to 4 decimal places Selected Answer:
An option is written over 1,000 Pacific Limited shares. The option gives the right to sell...

An option is written over 1,000 Pacific Limited shares. The option gives the right to sell 1,000 Pacific shares at a price of $19.00 per share, on or before, 30th November. It is now the 18th of November. Currently a Pacific share can be traded on the stockmarket at a price of $20.40. The option contract can be sold on the market for $0.75. (i) Is this a call or a put option? (ii) What is the option’s exercise price?...

A call option gives its owner the _____ a security at the strike price within the...

A call option gives its owner the _____ a security at the strike price within the option period. 1. right, but not the obligation, to sell 2. obligation to buy 3. right to borrow 4. right, but not the obligation, to buy 5. obligation to sell
An option that gives its owner the right to sell a share of stock at a...

An option that gives its owner the right to sell a share of stock at a fixed strike price is known as a(n): put option synthetic option European option call option real option
An American call option gives the writer the _________ to _________ the underlying asset at the...

An American call option gives the writer the _________ to _________ the underlying asset at the exercise price on or before the expiration date. Multiple Choice obligation, sell obligation, buy right, buy right, sell

A futures put option provides its holder with the _______ to ___________. Multiple Choice obligation, deliver...

A futures put option provides its holder with the _______ to ___________. Multiple Choice obligation, deliver a futures contract at a specified price for a specified period of time obligation, purchase a futures contract for the delivery of options on a particular stock right, purchase a particular stock at some time in the future at a specified price right, deliver a futures contract and receive a specified price at a specific date in the future

		the right to buy something
		the right to sell something
		the obligation to buy something
		the obligation to sell something
		none of the above