Which One of the Following Statements Is Correct for an Investor

question 57

Multiple Choice

Which one of the following statements is correct for an investor who has purchased portfolio insurance by owning a stock and buying a put option on that stock?

• A) The investor profits when the stock price declines.
• B) Maximum profitability occurs when the stock price equals the exercise price.
• C) The value of the position can decline no further than the option's exercise price.
• D) The option will certainly be exercised.

---

Definitions:

Life Chances

The opportunities each individual has to improve their quality of life, often influenced by socioeconomic status.

Status

The relative position or rank of an individual within a social system, determined by socio-economic conditions, occupation, education, and other factors.

Wealth And Status

Indicators of social position and economic capital, often signifying the amount of resources and prestige an individual or group possesses.

Model Minority

A demographic group (whether based on ethnicity, race or nationality) perceived to achieve a higher degree of socioeconomic success than the population average, thus serving as a benchmark for others.