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Basic Question 5 of 18
A contract giving the owner the right to sell a specific stock at a specific price by a certain date is a ______.
B. call option
C. future contract
D. stock index future contract
A. put option
B. call option
C. future contract
D. stock index future contract
User Contributed Comments 5
| User | Comment |
|---|---|
| rana1970 | not right but obligation |
| jpducros | Remember: Call = Buy ; Put = Sell |
| poomie83 | future is a commitment to sell not a right |
| johntan1979 | I almost got thrown off by "by a certain date". You can exercise the option at any time, but not after the expiration date. |
| GBolt93 | Rana it's an obligation only if you exercise the option, which you have the right to do or not do. |
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
determine the value at expiration and profit from a long or a short position in a call or put option
contrast forward commitments with contingent claims
CFA® 2025 Level I Curriculum, Volume 5, Module 2.