Q542
Up-front fee which must be paid by buyer to seller is called
A.
call premium
AnswerB.
discount premium
C.
strike premium
D.
exercise premium
Answer: Option A
Solution
Answer: Option A
Solution:
Up-front fee which must be paid by buyer to seller is called call premium. Call premium is the dollar amount over the par value of a callable debt security that is given to holders when the security is redeemed early by the issuer. The call premium is also called the redemption premium.