The price paid up front to buy an option contract is called the:
APartition
BPremium
CPosition
DPetition
Answer & Solution
Correct answer: B. Premium
1. The right to choose is not given away free.
2. The buyer pays the writer for it.
3. That payment is the premium.
_Source: OpenStax Principles of Finance 2e, Chapter 20, Risk Management and the Financial Manager._
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