Ownership of a call option entitles the owner to the ________ to ________ a specific stock, on or before a specific date, at a specific price.
A) right; buy
B) right; sell
C) obligation; buy
D) obligation; sell

Question

Quizplus · Accepted Answer

Ownership of a call option gives the owner the right, but not the obligation, to buy a specific stock at a specific price (known as the strike price) on or before a specific date (known as the expiration date). This can be beneficial if the stock price increases above the strike price, as the owner can buy the stock at the lower strike price and immediately sell it at the higher market price for a profit.

Ownership of a Call Option Entitles the Owner to the ________