Important Points for IC 89 - Management Accounting Exam
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Options are of two types: Call Option: The option to buy an asset is called Call option, Put option: The option to sell an asset is called Put option.
Keeping in view of application of maturity date, options are broadly classified as: European Option: In the case of a European Option the owner has the right to require the sale to take place on the maturity date. American Option: In the case of an American Option, the owner can require the sale to take place at any time up to the maturity date.
Credit Derivative is a contract that transfers credit risks from a protection buyer to a credit protection seller. Credit derivative products can take many forms, such as Credit Default Swaps, Credit Linked Notes and SWAPS.
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