If the option is not exercised by its date, the contract will simply:
AExtend
BEnlarge
CEndorse
DExpire
Answer & Solution
Correct answer: D. Expire
1. The holder is never obliged to act.
2. Doing nothing leaves the contract worthless.
3. It will expire.
_Source: OpenStax Principles of Finance 2e, Chapter 20, Risk Management and the Financial Manager._
Related questions
The exposure a coffee chain faces from volatile bean prices is commodity price:A futures contract is described as standardised, meaning its terms are not:A trader buying spare stock because prices may rise, purely to protect against that rise, Concerning whether an option is exercised, the writer of the option has:Choosing to trade at the strike price under an option is described as:The price paid up front to buy an option contract is called the:The fixed price written into an option contract is called the:The most common option contracts are written on shares of: