Asked by CHELSEY MYERS on Apr 26, 2024
Verified
The price that the buyer of a put option receives for the underlying asset if she executes her option is called the
A) strike price.
B) exercise price.
C) execution price.
D) strike price or execution price.
E) strike price or exercise price.
Put Option
It's a financial arrangement granting someone the choice, but excluding the duty, to dispose of an allocated quantity of an essential asset at a certain value within an allotted interval.
Buyer
An individual or entity that purchases goods or services in a transaction.
Strike Price
The specified price at which an options contract can be exercised.
- Distinguish and elucidate the terminology linked to options, encompassing strike price, premium, and statuses like in the money/out of the money.
Verified Answer
ST
Shelby ThomasApr 27, 2024
Final Answer :
E
Explanation :
The price that the buyer of a put option receives for the underlying asset if she executes her option is called the strike price or exercise price. Both terms are commonly used in the options market to refer to the fixed price at which the option holder can sell the underlying asset.
Learning Objectives
- Distinguish and elucidate the terminology linked to options, encompassing strike price, premium, and statuses like in the money/out of the money.