In option terms,the limited liability of corporate stockholders is
A)a forward contract
B)a call option
C)a put option
D)a protective put
E)a fiduciary call

Question

Quizplus · Accepted Answer

The limited liability of corporate stockholders is similar to a put option because it provides the right to sell the stock at a certain price (zero) if the company's value falls below that level, limiting the stockholder's loss to the amount invested.

In Option Terms,the Limited Liability of Corporate Stockholders Is