Buying a Stock Index Option Reduces Systematic Risk

question 1

True/False

Buying a stock index option reduces systematic risk.

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Definitions:

Object Permanence

Object permanence is the understanding that objects continue to exist even when they cannot be seen, heard, or otherwise sensed, a key cognitive development in infancy.

Principle

A fundamental truth, law, doctrine, or motivating force, upon which others are based or from which others are derived.

Principle of Conservation

A concept in cognitive development theory that an object's volume, mass, or quantity remains the same despite changes in its shape or form, usually understood by children during the concrete operational stage.

Quantity of a Substance

The quantity of a substance refers to the amount or number of units of that substance, which can be measured in various units depending on the physical property being observed.