The price paid for the option contract is referred to as the
A) forward price.
B) exercise price.
C) striking price.
D) option premium.
E) call price.

Question

Quizplus · Accepted Answer

The price paid for an option contract is referred to as the option premium, which is the cost paid by the buyer to the seller for the right to exercise the option. Option premium is determined by several factors, including the underlying asset price, the option expiration date, the strike price, and market volatility.

The Price Paid for the Option Contract Is Referred to as the