You Believe the Price of a Stock Is Going to Decline

question 97

Multiple Choice

You believe the price of a stock is going to decline within the next three months. Which one of the following option payoff profiles will reflect a profit if your belief is correct?

• A) Buying a call.
• B) Selling a call.
• C) Buying a put.
• D) Selling a put.
• E) None of these.

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Definitions:

Pedophilic Disorder

Disorder characterized by adult obtainment of sexual gratification by engaging in sexual activities with young children.

Heterosexual Men

Men who are sexually and romantically attracted to individuals of the opposite sex.

Sadistic

Deriving pleasure from inflicting pain, suffering, or humiliation on others.

Masochistic

Deriving pleasure from one's own pain or humiliation.