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Which of the following statements most accurately represents the positions of the parties to a derivatives contract?

A Both a put writer and a call writer have an obligation to exchange the underlying asset.

Both put and call writers (sellers) have an obligation to honor the terms of the option if it is exercised. Option holders (buyers) have the right, not the obligation, to exercise under the terms of the agreement. The holder pays a premium for this right, while the writer receives a premium for this obligation. A forward contract imposes an obligation on both the buyer and seller to exchange the underlying asset.

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