If an Individual Expected Securities Prices to Fall, That Investor

question 41

Multiple Choice

If an individual expected securities prices to fall, that investor could
1. buy put options
2. sell a stock index futures contract
3. sell stock short

• A)1 and 2
• B)1 and 3
• C)2 and 3
• D)all of the above

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Definitions:

Liabilities

Financial obligations or debts owed by a business to others, which must be paid back in the future.

Assets

Economic resources owned by a business that are expected to provide future benefits or value.

Balance Sheet

A financial statement that presents a company's financial position at a specific point in time, including assets, liabilities, and equity.

Owner's Capital

Represents the total equity belonging to the owners of a company or business, reflecting the net assets minus liabilities.