Which Combination of Positions Will Protect the Owner from Downside

question 8

Multiple Choice

Which combination of positions will protect the owner from downside risk?

• A) Buy the stock and buy a call option
• B) Sell the stock and buy a call option
• C) Buy the stock and buy a put option
• D) Buy the stock and sell a put option

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Definitions:

Slow Respiration

A decreased rate of breathing, which can be a sign of good health under certain conditions, such as during sleep or relaxation.

Palliative Care

A specialized area of healthcare focused on providing relief from the symptoms, pain, and stress of a serious illness, aimed at improving quality of life.

Terminally Ill

Refers to a person suffering from a disease or condition that is incurable and expected to lead to death.

Morphine

A potent opiate analgesic medication derived from the opium poppy, used to relieve severe pain.