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Financial Market Management — CBSE Class 10 board question

Q1. [1]
A buyer of an option pays for the right to exercise his option. Identify term used for this.
Previously asked in CBSE board exam
2023 92 Q3 (v)
Generated by claude-sonnet-4-6 · 2026-06-15 07:08 · grounding rag
Model Answer

The term used is Option Premium. It is the price paid by the option buyer to the option seller for acquiring the right to buy or sell.

Source: What is an 'Option Premium'?, Chapter 5

Explanation

The examiner expects you to name the term (Option Premium) and give a brief one-line definition. Since it is 1 mark, just the term alone may suffice, but adding a short definition ensures full credit.

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