Products & Their RisksQuestion 84 of 398
The buyer (holder) of a call option has the right to:
a.Sell the underlying stock at the strike price
b.Buy the underlying stock at the strike price
c.Require the writer to buy stock from the holder
d.Collect a fixed dividend from the underlying issuer
Explanation
A call option gives its buyer the right, but not the obligation, to buy the underlying security at the strike (exercise) price before expiration. Call buyers are generally bullish, profiting if the underlying price rises above the strike plus the premium paid.
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