Question
Which of the following statements is FALSE? When a writer of an option enforces the agreement and buys or sells a share of stock at
Which of the following statements is FALSE?
When a writer of an option enforces the agreement and buys or sells a share of stock at the agreed-upon price, he is exercising the option. | ||
There are two kinds of options. American options allow their holders to exercise the option on any date up to and including a final date called the expiration date. | ||
Because an option is a contract between two parties, for every owner of a financial option, there is also an option writer, the person who takes the other side of the contract. | ||
The price at which the holder buys or sells the share of stock when the option is exercised is called the strike price or exercise price. |
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