The Seller of a Put Option Is Transferring the Risk

question 89

Multiple Choice

The seller of a put option is transferring the risk:

• A)Of a price decrease of the stock to the buyer of the option.
• B)Of a price increase of the stock to the buyer of the option.
• C)This statement is incorrect since options do not transfer risk.
• D)This statement is incorrect since only sellers of call options are transferring risk.

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Definitions:

Energy Efficiency

The ratio of useful output of energy to the total input energy, reflecting how well energy is converted into useful work.

Carbon Dioxide Emissions

The release of CO2 into the atmosphere, primarily from burning fossil fuels, which contributes to global warming and climate change.

Land Use

Refers to the management and modification of natural environments or wilderness into built environments such as settlements and semi-natural habitats.

Biomass Fuels

Renewable energy sources derived from organic materials such as wood, waste, and alcohol fuels.