Question : Assertion: A call option gives the holder the right, but not the obligation, to sell an asset at a specified price.
Reason: A call option gives the holder the right to buy an asset at a specified price.
Option 1: Both assertion and reason are true, and the reason is the correct explanation of the assertion.
Option 2: Both assertion and reason are true, but the reason is not the correct explanation of the assertion.
Option 3: Assertion is true, but the reason is false.
Option 4: Assertion is false, but the reason is true.
Correct Answer: Assertion is true, but the reason is false.
Solution : The correct answer is (c) Assertion is true, but the reason is false.
The assertion is true. A call option gives the holder the right (but not the obligation) to buy an asset at a specified price, known as the strike price or exercise price.
The reason is false. The reason states that a call option gives the holder the right to buy an asset at a specified price, which aligns with the correct explanation of a call option. However, it does not align with the statement made in the reason itself, which incorrectly states that a call option gives the right to sell an asset.