Who of the following is potentially obligated to sell an asset at a predetermined price?
A call writer is obligated to sell the underlying asset at the exercise price if the call buyer exercises the right to purchase. A put writer instead has an obligation to…
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Who of the following is potentially obligated to sell an asset at a predetermined price?
Answer and explanation
Correct answer C
A call writer is obligated to sell the underlying asset at the exercise price if the call buyer exercises the right to purchase. A put writer instead has an obligation to buy, while option buyers hold rights rather than exercise obligations.
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Telangana SET (TG SET)