The seller of an option contract has the to buy or sell the underlying asset while the buyer of an option contract has the to buy or sell the underlying asset. O O O A right; obligation B с D obligation; right right; right obligation; obligation

Q: When I buy an option, I gain rights, but I also have obligations to the option seller. True Or…

A: Options are important financial derivatives widely used in financial markets.

Q: Describe each of the following derivative instruments and suggest a specific risky situation that…

A: All of these derivatives instruments defined below.

Q: A call option holder has an obligation to sell the asset. True or false?

A: A call option is an instrument which provides its holder an option to buy an underlying asset on a…

Q: The majority of the time, once a put option is purchased it is either sold for a gain or expires…

A: Options are derivative instruments in which the buyer of the option has the right or obligation to…

Q: one key difference between option contracts aND FUTURE CONTRACTS IS THAT IN AN OPTION CONTRACT, THE…

A: Option Contract-An options contract is a contract between two parties to facilitate a potential…

Q: Match the words with the term.   Question 4 options:   one who pays to use an asset…

A: Lease: It is an agreement between two parties where one party acquires the right to use of an asset…

Q: which are the terms and conditions for OPTION CONTRACT WITH SIMULTANEOUS TITLE CLOSING?

A: The option contract is an obligation to purchase the property in the future at a fixed predefined…

Q: Define the terms, or give short explanations.               -short sale/short selling…

A: A derivative is a financial contract whose value is derived from the underlying asset, which could…

Q: All parties involved in a swap will benefit from the creation of a swap arrangement. a. True O b.…

A: A swap arrangement refers to an agreement between two parties to exchange specified cash flows at…

Q: Which type of financial derivative gives the holder the right t predetermined expiration date? )…

A: Options: An option is a contract that gives the holder the right but not the obligation to buy or…

Q: Complete the following: Purchasing a call option gives you A The right to buy an asset at the market…

A: Call options are common derivative contracts which have been explained below.

Q: Hedgers can enter into an insurance policy, also known as a financia contract, also known as a…

A: There are mainly three types of derivative contracts. They are – futures, options and swaps.

Q: what is the fair value option? explain how the use of fair value option reflect application of the…

A: Fair Value option is that the board has taken an additional step of giving companies the option to…

Q: CFD is a derivative contract. Yes or No

A: Contract for Difference are also called as CFDs.

Q: how can a lease fee estate have a value that can be transferred to another party?

A: Lease fee Estate: Properties held by a single individual and rented out for a specific amount of…

Q: The buyer of a Put Option has the right but not the obligation to sell the underlying stock. True…

A: A put option is a derivative contract giving the purchaser/owner the right, but not the obligation,…

Q: The seller of a forward contract:  Question 16Answer a. is obligated to take delivery and pays…

A: The objective of the question is to understand the obligations and rights of the seller in a forward…

Q: In the context of options, what is the "premium"? A) The cost of entering into the option contract…

A: Call and put options are financial derivatives that provide the holder the right, but not the…

Q: The seller of a put option is not necessarily the seller of the underlying asset. Select one: O True…

A: Put options are vital financial derivatives which provide the right to sell the asset at the…

Q: Forward contracts are: i) Standard contracts traded on organized markets ii) Settled at end of…

A: FORWARD CONTRACT: It is the customized contract between to parties to buy or sell the asset at…

Q: If instead of an unguaranteed residual value, there is a purchase option which is so low that it is…

A: As per IAS 17 "Leases " , if the lessee has an option to purchase the asset at a price which is…

Q: Which of the following is true about forward contract expiration?  a.A deliverable forward contract…

A: On the date of expiration of a forward contract, settlement can be made on delivery basis or on cash…

Q: Which of the following may be classified as a financial asset at fair value through profit or loss?…

A: Solution: The following may be classified as a financial asset at fair value through profit or…

Q: A "cash and carry" transaction

A: Arbitrage is the strategy utilized by the investors, in which they make benefit of the asset…

Q: In Swap contract one counter party has an obligation but not right, while in an option contract the…

A: Swap is a contract between two parties to exchange cash flows of a contract to each other. The leg…

Q: What are three similarities of a future contract and a forward contract?

A: Forwards are the contract made for the private placements while futures are traded under stock…

Q: Which type of financial derivative is used to protect against adverse price movements in an asset?…

A: Financial derivatives are instruments whose value derives from the underlying assets or securities,…

Q: A seller of a futures contract can choose not to deliver the underlying asset. True O False

A: Future Contracts refers to a legal agreement or contract between the buyers or sellers to buy…

Q: Which of the following best describes an option contract? a. It gives the holder the obligation to…

A: The option contract is a type of derivative contract which will be providing with the right to buy…

Q: For a call option, the: *       A. buyer is locked into receive the underlying asset at a specified…

A: Call option is a type of contract in which buyer has right or option to purchase specified asset or…

Q: The major difference between future and option arises from the different obligations of buyers and…

A: The option and future are used to hedge investment as well as to make money and it represents the…

Q: Nderivative Anon-derivative debt instrument All of these Anon-derivative equity instrument

A: Solution: The following may be classified as a financial asset at fair value through profit or loss:…

Q: The majority of the time, once a call option is purchased it is either sold for a gain or expires…

A: Call option holder has a right to buy a particular stock at expiry date at a strike price or lapse…

Q: The European call option gives the option buyer the right to exercise the option: Select one: O a.…

A: Solution:Call option means right to buy the underlying asset at strike price at maturity, if spot…

Q: A call option: Choose the right answer:   a. is the right to buy at the strike price on or before a…

A: Option to sell is known as put option. Required to buy or sell the asset is futures contract. Option…

Q: The forward contract price, established when the contract is initiated at t = 0, is denoted as…

A: Forward Price: It refers to the contract price of an underlying financial asset or commodity that is…

Q: Which of the following describes a short put option? The obligation to sell an asset for a certain…

A: The put option give the right to the holder to sell the Asset by certain by certain date certain…

Q: A call option give (a) the right to sell the underlying security (b) the obligation to sell the…

A: A call option is an instrument which provides its holder an option to buy an underlying asset on a…

Q: 13 When selling a property on a lease option, what should the person you are selling to be referred…

A: Lease Option Lease option is an written agreement under which allows the tenant to use the property…

Q: Distinguish between a conditional sale, on the one hand, and an absolute sale, on the other hand

A: Sale is a transaction between buyer and seller where seller transfers his asset to buyer in exchange…

Q: The value of a derivative does not depend on the value of its underlying asset. True or False

A: False.The value of a derivative is directly influenced by the value and behavior of its underlying…

Q: A contract to sell is the same as a conditional contract of sale. Do you agree? Explain your answer.

A: A contract to sell is a contract that is legally binding and involves the purchase of products or…

Q: A put option gives the owner (a) the right to sell the underlying security. (b) the obligation to…

A: A put option is an instrument which provides its holder an option to sell an underlying asset on a…

Q: An option to buy the asset is referred to as a _______, while an asset to sell the asset is called a…

A: The options contracts refer to the contracts between two parties that agree to buy and sell a…

Q: The notional amount of a derivative instrument is

A: The notional amount of a derivative instrument is (A) related to the number of units specified…

Q: What are the two things that happened in the sale-leaseback agreement?

A: Sale and Leaseback Agreement is a kind of financial transaction. This is a situation that arises…

Q: This is a legal maxim most likely similar to a sale and leaseback transaction. traditio brevi manu…

A: Option Traditio Constitutum possessorium is correct.... It is a delivery that takes place when the…