You Believe the Price of a Stock Is Going to Decline

question 6

Multiple Choice

You believe the price of a stock is going to decline within the next three months.Which one of the following option payoff profiles will reflect a profit if your belief is correct?

• A)buying a call
• B)selling a call
• C)buying a put
• D)selling a put

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Definitions:

Exchange Rates

The price of one currency in terms of another for conversion purposes.

National Governments

The organization that leads a country, making and enforcing laws, and managing public resources and services.

European Union (EU)

28-nation European economic alliance.

National Market

The domestic marketplace within a country where goods and services are bought and sold.