An option that gives investors right to sell a stock at predefined price is classified as____________?
Correct answer: A. Put option
- A. Put option
- B. Call option
- C. Money back options
- D. Out of money options
Explanation
A put option gives its holder the right to sell the underlying stock at a specified price, called the exercise or strike price. A call option gives the right to buy, which is the common trap here.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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