The potential loss incurred from purchasing a call option is finite, but the potential loss to the seller is unbounded.  Explain why the potential loss that the seller may occur is unbouned.

The seller (or the writer) of a call option: may have the obligation to sell the underlying asset at a strike price until an expiration date may have the obligation to buy the underlying asset at a strike price until an expiration date has the right to sell the underlying asset at a strike price until an expiration date has the right to buy the underlying asset at a strike price until an expiration date None of these answers are correct.

If underlying is non-dividend paying, then the time value of an American call option is positive, hence American call should never be exercised early. True False

Payoff from entering into a forward contract does the buyer have more to gain going long than the seller has to lose going short, profits if the price of the underlying at expiration exceeds the forward price and/or gains from owning the underlying versus owning the forward contract are equivalent? Explain why one or more of the options above are correct. and why, if any of the remaining options are incorrect.