Which one of the following grants its owner the right to buy or to sell an asset at a prespecified price at any time during a stated period?

Question

Quizplus · Accepted Answer

An option is a contract that gives the holder the right, but not the obligation, to buy or sell an underlying asset at a pre-specified price, called the strike price, at any time during the life of the contract. This grants the owner the right to buy or sell the asset, but they are not obligated to do so. A forward contract, futures contract, and swap are all agreements between parties to buy or sell an asset in the future, but they differ in terms of the specifics of the agreement and the obligations of each party. An intrinsic contract is not a financial term.

Which One of the Following Grants Its Owner the Right