Which Three of the Following Generally Describe the Preferences and Situation

question 26

Multiple Choice

Which three of the following generally describe the preferences and situation of a primary investor?

• A) A preference for low risk
• B) Having small amounts to invest
• C) A wish for high agreement costs
• D) A preference for high liquidity

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Definitions:

Options Strategy

A plan or approach for trading options that can involve buying and/or selling one or more options that differ in one or more of the options' variables.

Security

A financial instrument that represents an ownership position in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option.

Gains

Profits realized from the sale of assets or from investment income, including dividends, interest, and capital gains.

Strike Price

The specified price at which the buyer of an option can buy (in the case of a call option) or sell (in the case of a put option) the underlying asset.