Question

A call option gives the purchaser the right to sell 100 shares of a stock at a guaranteed price before a definite expiration date. group of answer choices

O true
O false

Answer 1

A call option gives the right to buy, not sell, shares at a guaranteed price before an expiration date; to sell shares, a put option is needed. Option B is correct.

Step-by-step explanation:

The statement that "a call option gives the purchaser the right to sell 100 shares of a stock at a guaranteed price before a definite expiration date" is false. A call option actually gives the purchaser the right to buy a certain number of shares, often 100, at a predetermined price called the strike price before a specified expiration date. If the purchaser wishes to have the right to sell shares, they would need to purchase a put option, not a call option.

A call option gives the purchaser the right to buy 100 shares of a stock at a guaranteed price before a definite expiration date. This allows the purchaser to profit from a potential increase in the stock price. Therefore, the statement is false.