When a Bank sells a call option to an option buyer, the __________ of the option contract is shown as an ____________________ item in the books of the bank.

A call option gives the holder____a.the obligation to buy somethingb.the right to sell somethingc.the right to buy somethingd.the obligation to sell somethinge.None of the Above

A call option writer receives ___ for selling an option.Spot pricePremiumStrike PriceAcquisition priceNone of the above

Which of the following statement describes an option contract and the major distinction between a call and a put option?Group of answer choicesAn option is defined as the right, but not the obligation, to buy or to sell a specified amount of a given stock, commodity, currency, index or debt, at a specified price (the strike price) for a specified period of time.A put option contract gives a buyer the right not the obligation to sell an underlying security at certain price specified in the put option contract.All of the given answers.A call option contract gives a buyer the right not the obligation to purchase an underlying security at certain price specified in the call option contract.

Options are contracts that give the purchasers the_______a.option to buy or sell an underlying assetb.the obligation to buy or sell an underlying assetc.the right to hold an underlying assetd.the right to switch payment streams.

An options contract:Question 2Select one:a.is another name for a forward contract.b.gives the right to buy or sell an underlying asset at a predetermined price by a specified time.c.may be written for debt securities but not equities.d.may be written for equities but not debt securities.