An option gives its owner the right to buy or sell an asset.This asset is generally
A)preferred stock.
B)mutual funds.
C)corporate bonds.
D)common stock.
E)None of the above are correct.

Question

Quizplus · Accepted Answer

Options are commonly used in the trading of common stock. The owner of a call option has the right to buy the underlying stock at a predetermined price, while the owner of a put option has the right to sell the underlying stock at a predetermined price. Options may also be used for other types of assets, but common stock is the most common. Therefore, (D) common stock is the best choice.

An Option Gives Its Owner the Right to Buy or Sell