Which One of the Following Best Defines the Primary Purpose

question 59

Multiple Choice

Which one of the following best defines the primary purpose of a protective put?

• A)ensure a maximum purchase price in the future
• B)offset an equivalent call option
• C)limit the downside risk of asset ownership
• D)lock in a risk-free rate of return on a financial asset
• E)increase the upside potential return on an investment

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Definitions:

Break Even

The point at which total costs and total revenue are equal, resulting in no net loss or gain.