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Holder of a call option has the right but not the obligation to:
ASell the underlying at the strike price
BDeliver the underlying at maturity unconditionally
CBuy the underlying at the strike price
DReceive a guaranteed minimum return
Answer & Solution
Correct answer: C. Buy the underlying at the strike price
1. Identify what the question asks: this concept maps to calloption (§6.5).
2. Apply the framework or formula relevant to the topic.
3. Eliminate distractors and arrive at the correct option (C).
_Source: ICAI BoS CA Final Paper 2, Ch 9 "Derivatives Analysis and Valuation"_
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