An option gives its owner the right to buy or sell an asset. This asset is generally ________.

Question

Quizplus · Accepted Answer

Options are primarily used for buying or selling shares of common stock. While options can be purchased for other types of assets, such as preferred stock or corporate bonds, these are much less common than options for common stock. Mutual funds are not an underlying asset for options, as investors buy and sell shares of mutual funds directly. Therefore, the correct answer is D - options generally allow their owner to buy or sell common stock.

An Option Gives Its Owner the Right to Buy or Sell