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:

1. Price of the option.
2. Cost of the option.
3. 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:

1. Option price.
2. Option premium
3. Exercise price.
4. Strike price.

e. c and d only.

14. An option, which may be exercised only at the expiration date, is called:

1. An American option.

b. A European option.

c. An OTC option.

d. An exchange-traded option.

5. None of the above.