The type of option that gives the right to buyer to sell the underlying option at specific exercise price is considered as _____________?
Correct answer: B. put option
- A. call option
- B. put option
- C. European option
- D. Australian option
Explanation
A put option gives its buyer the right, but not the obligation, to sell the underlying asset at a specified exercise price. A call option instead gives the right to buy.
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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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