Which One of the Following Is the Primary Purpose of a Protective

question 16

Multiple Choice

Which one of the following is the primary purpose of a protective put?

• A)profit from an expected future increase in the underlying stock's value
• B)guarantee a higher return than is possible from just owning the underlying security
• C)offset the risk associated with a decrease in the value of the underlying asset
• D)receipt of the option premium
• E)increase in potential rate of return due to increase in risk

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Definitions:

Motor Tension

Physical manifestations of stress or anxiety, often including muscle tightness or aches.

Apprehensive Expectations

Feelings of anxiety or worry about future events or outcomes, often based on anticipated threats or negative experiences.

Hallucinations

Sensory experiences that occur in the absence of real stimuli.

Panic Disorder

A type of anxiety disorder characterized by unexpected and repeated episodes of intense fear accompanied by physical symptoms.