If you thought prices of stock would be rising over the next few months, you might want to ________ on the stock.
A) purchase a call option
B) purchase a put option
C) sell a futures contract
D) place a short-sale order

Question

Quizplus · Accepted Answer

If you believe that the price of a stock is going to rise over the next few months, the best choice is to purchase a call option on the stock. This gives you the right, but not the obligation, to buy the stock at a predetermined price (strike price) at a future date. As the stock rises in value, so will the value of the call option, allowing you to make a profit.

If You Thought Prices of Stock Would Be Rising Over