A call option is an agreement that:
A)obligates both the buyer and seller to a future transaction.
B)grants the seller the right to buy a security at a predetermined price.
C)gives the buyer the right to purchase an asset at some point in the future.
D)grants the seller the right, but not the obligation, to sell an asset.
E)presets a price but not a time period.

Question

Quizplus · Accepted Answer

A call option gives the buyer the right, but not the obligation, to purchase an asset at some point in the future at a predetermined price. The seller is obligated to sell the asset at that price if the buyer decides to exercise their option.

A Call Option Is an Agreement That