To the options buyer, the premium paid for the contract represents the
A) maximum return.
B) largest potential loss.
C) yield.
D) transaction cost.

Name: To the options buyer, the premium paid for the contract represents the A) maximum return. B) largest potential loss. C) yield. D) transaction cost.
Brand: Quizplus
Rating: 4.9 (38 reviews)

Question

Quizplus · Accepted Answer

The premium paid for an options contract represents the largest potential loss for the buyer, as the buyer cannot lose more than the premium paid for the option.

To the Options Buyer, the Premium Paid for the Contract