A put option is a contract
A) that gives the owner the right,but not the obligation,to buy shares of a stock at a specified price within the time limits of the contract.
B) that gives the owner the right,but not the obligation,to sell shares of a stock at a specified price within the time limits of the contract.
C) in which the seller agrees to provide a particular good to the buyer on a specified future date at an agreed-upon price.
D) that gives the owner the right,but not the obligation,to buy or sell shares of a stock at a specified price within the time limits of the contract.

Question

Quizplus · Accepted Answer

A put option is a type of financial contract in which the owner has the right, but not the obligation, to sell a specified amount of an underlying security (such as stock) at a specified price within a specified time frame. Therefore, choice B is the correct option as it states that a put option gives the owner the right, but not the obligation, to sell shares of a stock at a specified price within the time limits of the contract. The other choices refer to different types of contracts.

A Put Option Is a Contract