The option buyer who expects a stock price to decline will purchase ________.
A) a call
B) a warrant
C) a put
D) a convertible bond

Question

Quizplus · Accepted Answer

The option that gives the buyer the right to sell a stock at a certain price, which becomes favorable if the stock price decreases, is called a put option. Therefore, the option buyer who expects a stock price to decline will purchase a put option.

The Option Buyer Who Expects a Stock Price to Decline