___ is an investment strategy designed to earn a minimum rate of return while allowing the investor to benefit substantially from the positive returns generated by an investment in a risky portfolio.
A) Counterparty risk
B) Naked put writing
C) Covered call writing
D) Portfolio insurance

Question

___ is an investment strategy designed to earn a minimum rate of return while allowing the investor to benefit substantially from the positive returns generated by an investment in a risky portfolio.
A) Counterparty risk
B) Naked put writing
C) Covered call writing
D) Portfolio insurance

Quizplus · Accepted Answer

Portfolio insurance is a strategy that involves using options and other financial instruments to protect an investment portfolio against losses, while still allowing for gains when the market performs well. This strategy aims to ensure a minimum return, even in volatile markets, by dynamically adjusting the portfolio's exposure to risk.

___ Is an Investment Strategy Designed to Earn a Minimum