American Bankers Association Exam CTFA Topic 10 Question 75 Discussion

Actual exam question for American Bankers Association's CTFA exam

Question #: 75
Topic #: 10

Put Option is:

AA procedure that grants the holder the right but not the obligations to buy the main asset at the specified market price.

BA strategy that grants the holder the right to sell the underlying asset at the actual price.

CAn instrument that grants the holder the right but not the obligations to sell the underlying asset at the specified strike price.

DAn activity that grants the holder the right to put obligations to the underlying asset at the specified strike price.

Show Suggested Answer

Suggested Answer: C

by Merilyn at Sep 13, 2024, 09:42 AM

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Magda

1 months ago

I'm going with C. Seems the most precise and accurate description of a put option.

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Maryann

2 months ago

Haha, 'put obligations'? I don't think that's a thing. C is the clear winner here.

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Tricia

2 months ago

I agree with C. The other options don't quite capture the essence of a put option.

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Casandra

1 months ago

D) An activity that grants the holder the right to put obligations to the underlying asset at the specified strike price.

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Diego

1 months ago

C) An instrument that grants the holder the right but not the obligations to sell the underlying asset at the specified strike price.

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Edward

1 months ago

B) A strategy that grants the holder the right to sell the underlying asset at the actual price.

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Yvonne

1 months ago

A) A procedure that grants the holder the right but not the obligations to buy the main asset at the specified market price.

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Markus

2 months ago

C definitely sounds right to me. The key is the 'right but not the obligation' part.

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Kristofer

22 days ago

C) An instrument that grants the holder the right but not the obligations to sell the underlying asset at the specified strike price.

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Pansy

23 days ago

B) A strategy that grants the holder the right to sell the underlying asset at the actual price.

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Mica

2 months ago

A) A procedure that grants the holder the right but not the obligations to buy the main asset at the specified market price.

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Jenise

3 months ago

Hmm, I think the correct answer is C. A put option gives the holder the right, but not the obligation, to sell the underlying asset at a specified strike price.

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Chi

2 months ago

Exactly, it's about the right to sell the asset at a specific price.

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Beatriz

2 months ago

So, it's not about buying the main asset, right?

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Elke

2 months ago

So, a put option is essentially a form of insurance for investors in case the asset's price falls below the strike price.

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Afton

2 months ago

Yes, that's correct. It's important to remember that the holder is not obligated to sell, just has the right to.

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Roselle

2 months ago

I think you're right, a put option does give the holder the right to sell the underlying asset at a specified strike price.

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Dell

2 months ago

I agree, a put option gives the holder the right to sell the underlying asset at a specified strike price.

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Mitsue

3 months ago

I think the correct answer is C.

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Idella

3 months ago

I'm not sure, but I think it might be A. Buying at a specified market price seems like a put option to me.

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Vincent

3 months ago

I agree with Leonard, C makes sense because it's about selling at a specified price.

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Leonard

3 months ago

I think the answer is C.

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