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Suppose an Investor Sells (Writes) a Put Option

Question 3

Multiple Choice

Suppose an investor sells (writes) a put option. What will happen if the stock price on the exercise date exceeds the exercise price?


A) The seller will need to deliver stock to the owner of the option
B) The seller will be obliged to buy stock from the owner of the option
C) The owner will not exercise his option
D) None of the above

Correct Answer:

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