_________ is the initial price that the option buyer must pay to the option seller to acquire the contract.
A) Option adjusted spread
B) Net asset value
C) Market value added
D) Option premium
E) Competitive bid

Question

Quizplus · Accepted Answer

The initial price that the option buyer pays to the option seller to acquire the contract is known as the option premium. Option adjusted spread is a measure of the spread that takes into account the optionality of a security, net asset value is the value of a company's assets minus its liabilities, market value added is the difference between the market value of a company and the capital contributed by investors, and competitive bid refers to a process in which multiple buyers bid on an asset or contract.

_________ Is the Initial Price That the Option Buyer Must