Perfect timing ability is equivalent to having __________ on the market portfolio.
A) a call option
B) a futures contract
C) a put option
D) a forward contract

Question

Quizplus · Accepted Answer

A call option gives the holder the right to buy the market portfolio at a predetermined price in the future. This is similar to having perfect timing ability, as the holder can choose the best time to exercise the option and buy the portfolio at a favorable price.

Perfect Timing Ability Is Equivalent to Having __________ on the Market