Which is the best definition of a call option?
A)The right to buy an asset at a fixed price during a particular time period.
B)The right to sell an asset at a fixed price during a particular time period.
C)A security that gives the holder the right to purchase shares of a stock at a fixed price over a period of time.
D)The act of buying or selling the underlying asset via the option contract.

Question

Quizplus · Accepted Answer

A call option gives the holder the right, but not the obligation, to buy an underlying asset (such as a stock) at a fixed price (known as the strike price) during a specific time period. This is different from a put option, which gives the holder the right to sell the underlying asset at a fixed price during a particular time period. Option trading allows investors to speculate on the future price movements of assets without actually owning them.

Which Is the Best Definition of a Call Option