An option cannot be used to alter the risk/reward relationship from that of a position in the underlying.

Name: An option cannot be used to alter the risk/reward relationship from that of a position in the underlying.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Options can be used to alter the risk/reward relationship from that of a position in the underlying asset by providing strategic choices such as hedging, leveraging, or income generation, which can modify the potential outcomes and risks.

An Option Cannot Be Used to Alter the Risk/reward Relationship