Purchasers of stock options
A) own a financial asset with benefits of firm ownership.
B) have a claim on the profits of the firm issuing the underlying securities.
C) have the obligation to buy or sell a predetermined amount of shares at the strike price.
D) have the right to buy or sell a certain number of underlying shares.

Question

Quizplus · Accepted Answer

Stock option purchasers have the right, but not the obligation, to buy or sell a specified amount of underlying shares at a predetermined price (the strike price) within a specified time frame. This distinguishes options from futures contracts, which do carry an obligation to buy or sell.

Purchasers of Stock Options