5. An option that can be exercised at any time up to maturity is called a(n)

A. swap.

B. stock option.

C. European option.

D. American option.

6. A call option gives the owner

A. the right to sell the underlying security.

B. the obligation to sell the underlying security.

C. the right to buy the underlying security.

D. the obligation to buy the underlying security.

7. An option allowing the holder to buy an asset in the future is a

A. put option.

B. call option.

C. swap.

D. forward contract.

8. If you buy a call option on treasury futures at 110, and at expiration the market price is 115,

A. the call will be exercised.

B. the put will be exercised.

C. the call will not be exercised.

D. the put will not be exercised.