EIP Practice Questions - EFPA European Investment Practitioner Exam

In option contracts, what are the rights and obligations of a buyer of a put option?

The right to buy the underlying asset, with no obligation to do so. The obligation to buy the underlying asset at a specified price. The right, but not the obligation, to sell the underlying asset. The obligation to sell the underlying asset at a specified price.

Correct Answer:

The right, but not the obligation, to sell the underlying asset.

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