Which of the Following Can Be Used to Create a Long

question 7

Multiple Choice

Which of the following can be used to create a long position in a European put option on a stock?

• A) Buy a call option on the stock and buy the stock
• B) Buy a call on the stock and short the stock
• C) Sell a call option on the stock and buy the stock
• D) Sell a call option on the stock and sell the stock

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Definitions:

Gain From Trade

The gain from trade refers to the increase in consumer and producer surplus that results from an open market, allowing countries or individuals to specialize in production and exchange.

Carrots

Commonly known as a root vegetable, orange in color, and widely used in cooking for its sweet flavor and nutritional value.

Peas

A small green seed or the seed-pod of the Pisum sativum, commonly consumed as a vegetable.

Defend

To protect or uphold against challenge or criticism.