Chapter 02 · Section 2.1
The exercise price - Q1
The exercise price is the price at which:
c) the call writer may buy the underlying asset or the put holder may sell the underlying asset.
No. This statement is only partly correct. Remember that only one party to an option contract has the right - not the obligation - to buy or sell the underlying asset at the exercise price.
a) the call writer may buy the underlying asset or the call writer may sell the underlying asset.
b) the call holder may buy the underlying asset or the put holder may sell the underlying asset.
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