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Which financial market instrument grants the buyer the right, but not the obligation, to buy an asset at a predetermined price?

AForward Contract
BPut Option
CCall Option
DFutures Contract

Explanation

* A Call Option gives the holder the right (without obligation) to purchase an underlying asset at a specified strike price before or on expiry.
* A Put Option gives the right to sell an asset.
* Futures and Forward contracts impose mandatory obligations on both contractual parties.

Exam Relevance
  • Topic: Financial Derivatives
  • Subtopic: Options Contracts
Submitted by: mcqstutor Team More Finance & Accounting MCQs →

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