You sold (wrote) a May American put option on Netscape stock with an exercise price of $165. Which of the following statements is true?
A) You have the right to buy Netscape shares for $165 at any time prior to the option expiration in May, regardless of the stock's market price.
B) You are obligated to buy Netscape shares at $165 when the option expires in May, regardless of the stock's market price.
C) You have the right to sell Netscape shares for $165 at any time prior to the option expiration in May, regardless of the stock's market price.
D) You are obligated to sell Netscape shares at $165 when the option expires in May, regardless of the stock's market price.
E) You are obligated to buy Netscape shares for $165 at any time prior to the option expiration in May, if the owner of the option chooses to exercise.
Correct Answer:
Verified
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