Portfolio Insurance Is a Technique That

question 70

Multiple Choice

Portfolio insurance is a technique that:

• A) programs trading decisions so they can be automated.
• B) constructs a synthetic put option for a share portfolio.
• C) makes an arbitrage profit whenever share prices fall.
• D) puts in place a ratio spread.

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Definitions:

Production Possibility Frontier

A curve depicting the maximum attainable combinations of two products that may be produced with available resources and technology.

Good X

Often refers to a specific product or commodity being analyzed or discussed in economic models.

Good Y

A generic term used in economic models to represent a particular product or service in the market.

Production Possibility Frontier

A curve depicting all maximum output possibilities for two goods, given a set amount of inputs, highlighting concepts of opportunity cost, efficiency, and trade-offs.