SIE Exam Question 845: Answer and Explanation

Question: 845

A call is an option to __________ a specified number of shares of stock during a specified period at a specified price. A buyer of a call option expects the price of the underlying stock to __________.

  • A. buy, fall
  • B. buy, rise
  • C. sell, fall
  • D. sell, rise

Correct Answer: B

Explanation:

A call is an option to buy a specified number of shares of stock during a specified period at a specified price. A buyer of a call option expects the price of the underlying stock to rise.

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