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195
15.Which of the following describes a protective put?
A.A long put option on a stock plus a long position in the stock
B.A long put option on a stock plus a short position in the stock
C.A short put option on a stock plus a short call option on the stock
D.A short put option on a stock plus a long position in the stock
A.A long put option on a stock plus a long position in the stock
B.A long put option on a stock plus a short position in the stock
C.A short put option on a stock plus a short call option on the stock
D.A short put option on a stock plus a long position in the stock
Answer: A
A protective put consists of a long put plus the stock. The holder of the put owns the stock that might become deliverable.
A protective put consists of a long put plus the stock. The holder of the put owns the stock that might become deliverable.
Flashcard info:
Author: CoboCards-User
Main topic: Finance & Investment
Topic: Derivatives
Published: 27.10.2015