Which of the following Derivatives Contract giveS the buyer/ holder of the contract the right (but not the obligation) to buy/sell the Underlying asset at a predetermined price within or at end of a specified period?

Options

A. Option contracts
B. Future contracts
C. Swap contracts
D. Forward contracts

Answer

A

Explanation

There are three basic types of contracts-options, swaps and futures/forward contracts-with variations of each Options Contract is a type which Derivatives Contract which gives the buyer/holder of the contract the right (but not the obligation) to buy/sell the underlying asset at a predetermined price within or at end of a specified period. The buyer/holder of the option purchase the right from the seller/writer for a consideration which is called the premium.