To provide insurance against declining prices on previously purchased stock, an investor could:
A) buy a call.
B) write a put.
C) buy a stock index option.
D) buy a put.

Name: To provide insurance against declining prices on previously purchased stock, an investor could: A) buy a call. B) write a put. C) buy a stock index option. D) buy a put.
Brand: Quizplus
Rating: 4.8 (43 reviews)

Question

Quizplus · Accepted Answer

Buying a put option gives the investor the right to sell the stock at a predetermined price, providing insurance against declining stock prices.

To Provide Insurance Against Declining Prices on Previously Purchased Stock