Three of the most important characteristics of options are:

A) premium, expiration date, exercise price
B) low transaction costs, flexibility, low liquidity
C) flexibility, high liquidity, high transaction costs
D) exercise price, low transaction costs, underlying asset

Question

Three of the most important characteristics of options are:

A) premium, expiration date, exercise price
B) low transaction costs, flexibility, low liquidity
C) flexibility, high liquidity, high transaction costs
D) exercise price, low transaction costs, underlying asset

Quizplus · Accepted Answer

Option contracts are chosen to form a part of an investment portfolio because of the liquidity,low transaction costs and flexibility of these contracts.Three of the most important characteristics of options are the premium,the expiration date of the option and the exercise price and these are generally quoted in the financial press.

Three of the Most Important Characteristics of Options Are