If an individual expected securities prices to fall, that investor could
1. buy put options
2. sell a stock index futures contract
3. sell stock short

Question

Quizplus · Accepted Answer

All the options listed are strategies investors might use if they expect securities prices to fall. Buying put options gives the right to sell a security at a predetermined price, selling a stock index futures contract locks in a future sell price for the index, and selling stock short involves borrowing stock to sell with the intention of buying it back at a lower price.

If an Individual Expected Securities Prices to Fall, That Investor