The price that the buyer of a call option pays for the underlying asset if she executes her option is called the A. premium B. exercise price C. execution price D. calling price
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The price that the buyer of a call option pays for the underlying asset if she executes her option is called the
- A. premium
- B. exercise price
- C. execution price
- D. calling price
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Solved in 2 steps
- The price level you choose for price protection on a call option is referred to as: A. The strike price B. The option premium C. The time value D. The intrinsic valueWhat is call option? What is payoff to call option buyer and seller on expiryDefine a call option’s exercise value. Why is the actual market price of a call optionusually above its exercise value?
- For a call option, the: * A. buyer is locked into receive the underlying asset at a specified time. B. writer is committed to handing over the specified asset if the holder of the call exercises the option. C. writer may choose whether or not to deliver the underlying asset at a specified time. D. buyer will choose to exercise the option only if the price of the underlying asset fallsAn option to buy the asset is referred to as a _______, while an asset to sell the asset is called a _______. Group of answer choices B. Put, Call D. Call, Short A. Short, Put C. Call, PutWhat is put option? What is payoff to put option buyer and seller on expiry?
- Time value of Option is Calculated using Price of the Option-Intrinsic Value of option Current Market Price -exercise price Intrinsic value of Option- Price of Option Exercise price - Current Market priceThe pay off from an option depends on the market price of the underlying asset a) a put holder benefits from increase in the price b)a put writer benefits from an increase in the price c) a call holder benefits from decrease in price d) none of these are trueFinance THE MAXIMUM LOSS FOR A CALL OPTION BUYER IS: A. THE STRIKE PRICE LESS THE OPTION PREMIUM B. THE STRIKE PRICE C. THE OPTION PREMIUM D.THE STRIKE PRICE PLUS THE OPTION PREMIUM
- Which of the following statements is true about call options? A.The holder of the option profits when the price of the underlying asset increases. B.It gives to the buyer of the option the right to sell a financial instrument within a specific time period, at a specified price. C.The holder of the option will exercise the option only if the price of the underlying asset is smaller than the strike price. D.The holder of the option receives a premium for writing the option.Which of the following best describes the intrinsic value of an option? The Black-Scholes-Merton price of the option The value it would have if the owner had to exercise it immediately or not at all The amount paid for the option The lower bound for the option’s priceWhat is payoff to put option holder on expiry?