5) An option that can be exercised any time before its expiration date is called:

A) a European option.

B) an American option.

C) a call option.

D) a put option.

6) A put option gives the owner the right

A) and the obligation to buy an asset at a given price.

B) and the obligation to sell an asset at a given price.

C) but not the obligation to buy an asset at a given price.

D) but not the obligation to sell an asset at a given price.

7) In June 2020, an investor buys a put option on Genentech stock with an exercise price of $75 and expiring in January 2022. If the stock price in July 2020 is $80 and has been exercised, then this option is

I) in-the-money

II) out-of-the-money

III) an American option

IV) a European option

A) I and III only

B) II and III only

C) I and IV only

D) II and IV only