Which one of the following provides the option of selling a stock anytime during the option period at a specified price even if the market price of the stock declines to zero?
A)American call
B)European call
C)American put
D)European put
E)either an American or a European put

Question

Quizplus · Accepted Answer

An American put option provides the option of selling a stock anytime during the option period at a specified price, known as the strike price, even if the market price of the stock declines to zero. This allows the holder of the option to limit their losses and protect their investment if the market price of the stock decreases. In contrast, a European put option can only be exercised at the expiration date, making it less flexible for risk management purposes.

Which One of the Following Provides the Option of Selling