SIE practice questionmediumOptions
Which of the following describes a put option?
- AThe right to sell a security at a specified price within a set time✓ Correct answer
- BThe obligation to buy a security at a specified price
- CA security that must be bought if assigned
- DThe right to buy a security at a specified price
Explanation
Why A — The right to sell a security at a specified price within a set time
A put grants the right to sell at the strike price. Calls provide the right to buy, and obligations fall on writers, not holders.
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