What Type of Option Will an Option Buyer Buy If

question 80

Multiple Choice

What type of option will an option buyer buy if they believe a share price will fall?

• A) Call
• B) Put
• C) Warrant
• D) Swaption

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Definitions:

Sublimation

A defense mechanism where socially unacceptable impulses or idealizations are transformed into socially acceptable actions or behavior, often resulting in a long-term conversion of the initial impulse.

Defense Mechanism

Psychological strategies brought into play by individuals, unconsciously, to protect themselves from anxiety and to cope with reality.

Unacceptable Impulse

A desire or thought that is not permitted by personal values or social standards, often repressed or denied.

Superego

In Freudian psychoanalysis, the part of the personality that acts as the ethical component, providing moral standards by which the ego operates.