SIE practice questioneasyOptions - Call and Put Basics
A customer believes a stock will rise and wants the right to buy it at a set price. Which option should they purchase?
- ACovered call
- BPut option
- CCall option✓ Correct answer
- DProtective put
Explanation
Why C — Call option
A call option gives the holder the right to buy the stock at the strike price. Puts give the right to sell, a covered call combines stock ownership with selling a call, and a protective put is a hedge for stock owners.
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