The Seller of a Put Option Is Transferring the Risk

question 47

Multiple Choice

The seller of a put option is transferring the risk:

• A) of a price decrease of the stock to the buyer of the option.
• B) of a price increase of the stock to the buyer of the option.
• C) this statement is incorrect since options do not transfer risk.
• D) this statement is incorrect since only sellers of call options are transferring risk.

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Definitions:

Type 1 DM

A chronic condition where the pancreas produces little or no insulin, necessitating daily insulin administration.

Diabetic Foot Ulcers

Diabetic Foot Ulcers are chronic sores that occur on the feet of people with diabetes, often due to neuropathy, poor circulation, and infection risk, requiring careful management.

Diabetic Glaucoma

A condition where an individual with diabetes develops glaucoma, often due to increased pressure in the eye that damages the optic nerve.

Type 1 DM

A chronic condition where the pancreas produces little or no insulin, often termed Type 1 Diabetes Mellitus.