An Investor Earns a Profit on a Put Option When

question 33

Multiple Choice

An investor earns a profit on a put option when:

• A)the increase in the index is greater than the premium paid.
• B)the index decreases.
• C)the decrease in the index is greater than the premium paid.
• D)None of the above

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Definitions:

Bank of the United States

A federally chartered bank in the early United States, involved in establishing the nation's financial system until its dissolution in the 1830s.

Federal Funds

Monetary resources provided by the federal government, which can be allocated to states, municipalities, or specific projects.

State-Chartered Banks

Banks that are established and regulated by a state government rather than the federal government.

Regulatory Powers

The authority granted to governmental bodies to regulate the behavior of individuals, businesses, and other entities within a society, especially in economic and social policy.