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1. When an option grants the buyer the right to purchase the designated instrument from the writer, it is referred to as a: a. Call
1. When an option grants the buyer the right to purchase the designated instrument from the writer, it is referred to as a:
a. Call option.
b. Put option.
c. Long forwards.
d. Long futures.
e. None of the above.
2. The option premium is the:
- Price of the option.
- Cost of the option.
- Value of the option.
d. All of the above.
e. None of the above.
13. The price at which the asset may be bought or sold is called the:
- Option price.
- Option premium
- Exercise price.
- Strike price.
e. c and d only.
14. An option, which may be exercised only at the expiration date, is called:
- An American option.
b. A European option.
c. An OTC option.
d. An exchange-traded option.
- None of the above.
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