Buying a Put on a Stock That You Already Own

question 60

Multiple Choice

Buying a put on a stock that you already own is called a _________. The purpose is to protect the stock from a decline in value.

• A) covered put
• B) protective put
• C) spread
• D) straddle
• E) Strap

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Definitions:

Annually Balancing

The process of adjusting or reconciling financial accounts or budgets to match or balance over a one-year period.

Cyclically Balanced Budget

A fiscal strategy where the government aims to balance its budget over the complete economic cycle, accumulating surpluses in boom periods and deficits during recessions.

Budget Deficits

A financial situation where a government's expenditures surpass its revenues.

Budget Surpluses

A situation where a government's revenue exceeds its expenditures over a specific period, indicating financial health.