n NISM Certifications
XV NISM Series XV
Medium

Who is potentially obligated to sell an asset at a predetermined price in an options contract?

Practice question from NISM XV Mock Test 7 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Put Buyer

  2. B

    Put Writer

  3. C

    Call Buyer

  4. Call Writer

    Correct answer

Why this is the answer

In options contracts, buyers have rights but no obligations. Sellers (writers) bear obligations. A Call Writer must sell the underlying asset at the strike price if the Call Buyer exercises the option. Similarly, a Put Writer must buy the asset if the Put Buyer exercises.

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