Puts are a conservative investment that can be used to reduce market risk.

Name: Puts are a conservative investment that can be used to reduce market risk.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Puts give the holder the right, but not the obligation, to sell a particular stock at a set price (strike price) within a certain time frame. If the stock price falls below the strike price, the holder can exercise the option and sell their stock at the higher strike price, effectively reducing their market risk.

Puts Are a Conservative Investment That Can Be Used to Reduce