Canadian Securities Course (CSC) Practice Exam · Question
Which of the following derivatives provides the holder with the right, but not the obligation, to buy or sell an underlying asset?
An option contract gives the holder the right, but not the obligation, to buy (call option) or sell (put option) an underlying asset at a specified price before
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Question: Which of the following derivatives provides the holder with the right, but not the obligation, to buy or sell an underlying asset?
Answer options:
- Forward contract
- Futures contract ✅ Option contract
- Swap agreement
Correct answer: Option contract
Explanation: An option contract gives the holder the right, but not the obligation, to buy (call option) or sell (put option) an underlying asset at a specified price before or on a certain date. Futures and forwards are obligations.
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