Which One of the Following Is the Primary Purpose of a Protective

question 16

Multiple Choice

Which one of the following is the primary purpose of a protective put?

• A)profit from an expected future increase in the underlying stock's value
• B)guarantee a higher return than is possible from just owning the underlying security
• C)offset the risk associated with a decrease in the value of the underlying asset
• D)receipt of the option premium
• E)increase in potential rate of return due to increase in risk

---

Definitions:

Linear

This term describes a sequence or process that proceeds in a straight line or a step-by-step progression without deviation.

Structured

Organized in a clear, systematic way, often following a specific format or set of rules to arrange data or information.

Integrated Development Environment (IDE)

A software tool offering extensive features to developers for the creation of software.

Source Code Editor

A software tool that provides programmers with a platform to write and edit source code of computer programs.