1.

Which of the following Derivatives Contract giveS the buyer/ holder of the contract the right (but not the obligation) to buy/sell the Underlying asset at a predetermined price within or at end of a specified period?A. Option contractsB. Future contractsC. Swap contractsD. Forward contracts

Answer» Correct Answer - A
There are three basic types of contracts-options, swaps and futures/forward contracts-with variations of each Options Contract is a type which Derivatives Contract which gives the buyer/holder of the contract the right (but not the obligation) to buy/sell the underlying asset at a predetermined price within or at end of a specified period. The buyer/holder of the option purchase the right from the seller/writer for a consideration which is called the premium.


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