Options Are Popular Because of All of the Following EXCEPT

question 33

Multiple Choice

Options are popular because of all of the following EXCEPT:

• A)Stock prices are volatile.
• B)They offer a tool to transfer risk.
• C)They present a tool to limit losses but also limit gains.
• D)They offer opportunities for high leverage.

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Definitions:

Negotiated

The process of discussing terms in order to reach a mutual agreement, often used in the context of contracts, salaries, and business deals.

Fixed Amount

A specified sum that does not vary or change under specified conditions.

Principal

A main party to a transaction, such as the owner of a business or the party who has authorized an agent to act on their behalf.

Interest

The cost of borrowing money, typically expressed as a percentage of the principal, paid by the borrower to the lender for the use of their money.