Final answer:
The correct answer is option A. bilateral contract.
Step-by-step explanation:
An option is a financial derivative that represents a contract sold by one party (option writer) to another party (option holder). The contract offers the buyer the right, but not the obligation, to buy (call option) or sell (put option) a security or other financial asset at an agreed-upon price (the strike price) during a certain period or on a specific date.
Prior to being exercised, an option would be an example of a bilateral contract. This is because it is a contract that involves two parties, where each party has made a promise to the other. In the case of an option, the seller (option writer) has promised to sell the asset at the specified strike price if the buyer (option holder) chooses to exercise the option. Conversely, the buyer has paid a premium for this right and may exercise the option, thus completing the contract.
An executed contract refers to a contract that has been fully performed, whereas an option that has not been exercised is not fully performed. A unilateral contract involves a promise from one party in exchange for a performance by another, but since both parties in an option contract have obligations, it is not unilateral. Lastly, an assigned contract refers to a contract where the rights or obligations have been transferred from one party to another, which is not inherent to an option prior to exercise.