n NISM Certifications
XV NISM Series XV
Medium

A _______ is potentially obligated to sell an asset at a predetermined price.

Practice question from NISM XV Mock Test 3 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. Call Writer

    Correct answer

  2. B

    Call Buyer

  3. C

    Put Writer

  4. D

    Put Buyer

Why this is the answer

In options, buyers have the right but no obligation, while writers (sellers) have the obligation. A Call Writer must sell the asset to the Call Buyer at the predetermined price if exercised. Similarly, a Put Writer must buy the asset if the Put Buyer exercises the option.

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