Which one of the following actions will provide you with the right,but not the obligation,to sell the underlying asset at a specified price during a specified period of time?
A)purchase of a call option
B)sale of a call option
C)purchase of a put option
D)sale of a put option
E)swap

Question

Quizplus · Accepted Answer

The purchase of a put option provides the buyer with the right, but not the obligation, to sell the underlying asset at a specified price (the strike price) during a specified period of time. A call option gives the buyer the right, but not the obligation, to buy the underlying asset at a specified price, while the sale of a call option and put option give the seller the obligation to sell or buy the underlying asset, respectively. A swap is a different type of financial instrument that involves the exchange of cash flows.

Which One of the Following Actions Will Provide You with the Right,but