Which One of the Following Acts Like an Insurance Policy

question 32

Multiple Choice

Which one of the following acts like an insurance policy if the price of a stock you own suddenly decreases in value?

• A)sale of a European call option
• B)sale of an American put option
• C)purchase of a protective put
• D)purchase of a protective call
• E)either the sale or purchase of a put

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Definitions:

Tenant

An individual or entity that occupies property or land rented from a landlord under a lease agreement.

Rent

The payment made by a tenant to a landlord for the use of property, land, or a building.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of the firm’s financial condition.

Accrued Revenues

Income generated but not yet received in cash or documented at the time of the statement.