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.

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.

.What is the difference between a call option and a put option?*1 pointa. A call option gives the holder the right to buy an underlying asset, while a put option gives the holder the right to sell an underlying asset.b. A call option gives the holder the right to sell an underlying asset, while a put option gives the holder the right to buy an underlying asset.c. A call option and a put option are the same thing.d. A call option and a put option have no relation to buying or selling an underlying asset

A ________ option is an option to purchase a specified number of shares on or before some future date at a specified price, whereas a _______ option is an option to sell a specified number of shares on or before some future date at a specified price. ______ are bought if the share is expected to rise.Question 1Select one:a.put; call; Putsb.call; put; Putsc.call; put; Callsd.put; call; Calls

Which of the following statements is CORRECT?a.Put options give investors the right to buy a stock at a certain strike price before a specified date.b.Call options give investors the right to sell a stock at a certain strike price before a specified date.c.Options typically sell for less than their exercise value.d.An option holder is not entitled to receive dividends unless he or she exercises their option before the stock goes ex dividend.

In option markets the price specified in the option contracts for calls and puts is called the:Question 2Select one:a.market price.b.option price.c.strike price.d.expected value.