The seller's the ability to have a selection of securities from which to choose one for delivery is called the ________ option.
A) Carrying
B) Cheapest-to-deliver
C) Call
D) Put
E) Bond

Question

Quizplus · Accepted Answer

The "cheapest-to-deliver" option refers to the seller's ability to choose from a range of securities the one that is most cost-effective for them to deliver on a futures contract. This is common in futures contracts where multiple securities can fulfill the contract's requirements.

The Seller's the Ability to Have a Selection of Securities