A ___________ option could be used to pay back the initial premium where the price falls ____________________,in which case the option is sometimes called a money back option.

A) call; outside certain bounds
B) contingent premium; within certain bounds
C) put; before the expiry date
D) put; within certain bounds

Question

A ___________ option could be used to pay back the initial premium where the price falls ____________________,in which case the option is sometimes called a money back option.

A) call; outside certain bounds
B) contingent premium; within certain bounds
C) put; before the expiry date
D) put; within certain bounds

Quizplus · Accepted Answer

A contingent premium option could be used to pay back the initial premium where the price falls within certain bounds,in which case the option is sometimes called a money back option.This option might be preferred where the buyer believes the option will mature in-the-money.

A ___________ Option Could Be Used to Pay Back the Initial