An investor would buy a ________ if he or she believes that the price of the underlying stock or asset will fall in the near future.

Question

Quizplus · Accepted Answer

A put option gives the investor the right to sell the underlying asset at a predetermined price, known as the strike price, at a specified time in the future. If the price of the underlying asset falls below the strike price, the investor can make a profit by exercising the option and selling the asset at the higher strike price. Therefore, if an investor believes that the price of the underlying stock or asset will fall in the near future, they would buy a put option.

An Investor Would Buy a ________ If He or She