The amount paid by the buyer of an option to compensate the seller for accepting the risk of a loss with no possibility of a gain is called
A)the strike price.
B)an option premium.
C)a risk premium.
D)a margin requirement.

Question

Quizplus · Accepted Answer

The amount paid by the buyer of an option is called the option premium. The option premium compensates the seller for accepting the risk of a loss with no possibility of a gain.

The Amount Paid by the Buyer of an Option to Compensate