True or False The buyer of a call option eants the price of the stock to rise

Finance Dec 21, 2020

True or False

The buyer of a call option eants the price of the stock to rise

Expert Solution

True

The buyer of the call option wants the stock to rise. A call option gives the buyer the right to buy buy not the obligation. The buyer of call option pays the premium and will exercise the option with the expectation that the stock price will increase and will yield profits.

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