Concept 21.1-17 – Find the false statement

Fundamentals of Corporate Finance

Berk, DeMarzo, and Harford

05th Edition

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Of the following choices, identify which is false:

  1. The owner of a put option has the right but not the obligation to sell the underlying asset.
  2. Financial options contracts give the writer the right, but not the obligation to purchase or sell the underlying asset at the strike (fixed) price at some future date.
  3. The owner of a call option has the right to buy the underlying asset
  4. The holder of a stock option can choose to buy or sell a share of stock.

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