Question: Consider the following statements about options. Statement 1: As the option buyer does not have to exercise the option beyond the initial payment of the

Consider the following statements about options.

  • Statement 1: As the option buyer does not have to exercise the option beyond the initial payment of the premium, there is no obligation of the option buyer to the option seller.
  • Statement 2: Default in options is possible only from the long to the short.
  • Statement 3: The put holder should exercise the put at expiration if the underlying asset is worth less than the exercise price.

Which of the following is most likely?

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