If you expect a stock market downturn, one potential defensive strategy would be to ________.

Question

Quizplus · Accepted Answer

Selling stock-index futures can help protect against a potential stock market downturn by allowing the investor to lock in a price to sell their stocks at a future date. This can minimize losses if the market does indeed decline. Buying stock-index futures or options may offer potential gains if the market rises, but they do not provide protection against losses. Selling foreign exchange futures is not necessarily relevant to protecting against a stock market downturn.

If You Expect a Stock Market Downturn, One Potential Defensive