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Which of the Following Is Not True Concerning Call Option

Question 41

Multiple Choice

Which of the following is not true concerning call option writers?


A) Writers promise to deliver shares if exercised by the buyer.
B) The writer has the option to sell shares but not an obligation.
C) The writer's liability is zero if the option expires out-of-the-money.
D) The writer receives a cash payment from the buyer at the time the option is purchased.
E) The writer has a loss if the market price rises substantially above the exercise price.

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