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What is a call option?

  1. A The right, but not the obligation, to buy an asset at a set price
  2. B An obligation to buy
  3. C The right to sell
  4. D A form of debt security
Answer

The right, but not the obligation, to buy an asset at a set price

The buyer's maximum loss is the premium paid, while the writer of an uncovered call faces theoretically unlimited loss.

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