1. Which of the following statements is CORRECT? a. Put options give investors t
ID: 2676135 • Letter: 1
Question
1. Which of the following statements is CORRECT?a. Put options give investors the right to buy a stock at a certain strike price before a specified date.
b. Call options give investors the right to sell a stock at a certain strike price before a specified date.
c. Options typically sell for less than their exercise value. d. LEAPS are very short-term options that were created relatively recently and now trade in the
market. e. An option holder is not entitled to receive dividends unless he or she exercises their option
before the stock goes ex dividend.
Explanation / Answer
e. An option holder is not entitled to receive dividends unless he or she exercises their option
before the stock goes ex dividend.
Not a because puts = right to sell (not buy)
Not b because call=right to buy (not sell)
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