Chapter 02 · Section 2.1

Option premiums - Q4

An option premium is paid:

a) when the option is exercised.
b) when the option transaction takes place.
• c) when the option transaction takes place and is refunded when the option is exercised.
  No. When you buy an option, you pay for and acquire a right, with no possibility of a refund whether you exercise the option or not.

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