n NISM Certifications
XXI NISM Series XXI-A
Medium

In a call option, the option holder:

Practice question from NISM XXI A for PMS - Mock Test 2 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Has the right to sell the underlying asset at a specified price

  2. B

    Has the obligation to buy the underlying asset at a specified price

  3. Has the right to buy the underlying asset at a specified price

    Correct answer

  4. D

    Must buy the underlying asset at the strike price at expiration

Why this is the answer

Call options give the right, but not the obligation, to buy.

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