SIE practice questionhardOptions—Put Writing
An investor writes a put option. If exercised, their obligation is to:
- ASell the underlying security at the strike price
- BBuy the underlying security at the strike price✓ Correct answer
- CDeliver the option premium
- DRedeem shares at NAV
Explanation
Why B — Buy the underlying security at the strike price
A put writer must buy the underlying security if exercised. Selling the security is the call writer's obligation. Option premiums are paid upfront. NAV is unrelated to options.
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