The buyer of option contract

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Reference no: EM132061068

1. The buyer of an option contract:

receives the option premium in exchange for an obligation to either buy or sell an underlying asset.

pays an option premium in exchange for a right to buy or sell an underlying asset during a specified period of time.

receives the option premium in exchange for guaranteeing the purchase or sale of an underlying asset if called upon to do so.

pays the strike price at the time the option is purchased and in exchange receives the right to exercise the option at any time during the option period.

pays the option premium in exchange for receiving the strike price at a later date.

2. The terms of sale generally include which of the following?

I. type of credit instrument

II. cash discount

III. credit period

IV. discount period

I and III only

III and IV only

I, II, III, and IV

II, III, and IV only

II and IV only

Reference no: EM132061068

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