A call option differs from a put option in that

Multiple Choice

• a call option gives the investor the right to purchase a given number of shares of a specified stock at a set price; a put option gives the investor the right to sell a given number of shares of a stock at a set price.

• a put option has risk, since leverage is not as great as with a call.

• both give the investor the opportunity to participate in stock market dealings without the risk of actual stock ownership.

• a call option obliges the investor to purchase a given number of shares in a specific common stock at a set price; a put obliges the investor to sell a certain number of shares in a common stock at a set price.