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SIE: Options
SIE practice questioneasyCall options

Which statement is true about the buyer of a call option?

  1. AThey have the right to buy the underlying stock at the strike price✓ Correct answer
  2. BThey have the obligation to buy the stock
  3. CThey have the right to sell the stock at the strike price
  4. DThey must receive an assignment notice
Explanation

Why AThey have the right to buy the underlying stock at the strike price

Call buyers have the right (not the obligation) to purchase underlying shares at the strike price. B and D are incorrect regarding rights, and C describes puts.

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