If You Expect the Price of a Stock to Decrease

question 6

Multiple Choice

If you expect the price of a stock to decrease and its volatility to increase,then the most appropriate strategy to use is a

• A)Long put
• B)Short put
• C)Long Call
• D)Short call

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Definitions:

Basic Elements

Fundamental components or parts that constitute an object, concept, or system.

Sensations

The physical feelings or perceptions resulting from something that happens to or comes into contact with the body.

Structuralism

An approach in psychology that seeks to understand the structure of the mind by analyzing its components, like sensations and perceptions.

Observable Behavior

Actions or reactions of an individual that can be directly seen and measured.