CFA Practice Question

There are 206 practice questions for this study session.

CFA Practice Question

The ______ of a ______ option has the obligation to buy 100 shares of common stock at a specified price for a given period of time.

A. owner; put
B. owner; call
C. writer; call
D. writer; put
Correct Answer: D

The writer of a put option has the obligation to buy 100 shares of stock at an agreed upon price, during the period of the contract.

User Contributed Comments 2

User Comment
viannie put option = the right to sell if you sell the put option
so if you issue the put option, it's the opposite, you're obligated to buy
group A very good question- viannie you have clarified my confusion:

put option is a right to sell and the writer of the put option has the obligation to buy
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