The Option Buyer Who Expects a Stock Price to Decline

question 7

Multiple Choice

The option buyer who expects a stock price to decline will purchase

• A) a put.
• B) a convertible bond.
• C) a warrant.
• D) a call.

Distinguish between different ethical dilemmas involving organizational resources, conflicts of interest, and customer confidence.

Grasp Kohlberg's stages of moral development and their application to ethical decision-making.

Acknowledge the influence of social and organizational factors on ethical behavior.

Understand the role of ethical frameworks in guiding personal and professional behavior.

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Definitions:

Preferred Stock

A class of stock that offers dividends and/or liquidation preferences over common stock but typically does not carry voting rights.

Par Value

A nominal value assigned to shares of stock by a company's charter, which has little relation to its market value.

Dividends Paid

The portion of a corporation's earnings distributed to shareholders, typically in the form of cash or additional shares.

Dividend Yield

Dividend yield is a financial ratio that shows how much a company pays out in dividends each year relative to its stock price, indicating the return on investment for shareholders.