Investment VehiclesQuestion 26 of 110
A call option gives the holder which right?
a.The obligation to sell the underlying asset at the strike price
b.The right to sell the underlying asset at the strike price
c.The right to buy the underlying asset at the strike price
d.The obligation to buy the underlying asset at the market price
Explanation
A call option grants its holder the right, not the obligation, to buy the underlying asset at a fixed strike price before expiration. A put option, by contrast, grants the right to sell. The option writer, not the holder, takes on an obligation.
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