The Primary Purpose of a Protective Put Is

question 23

Multiple Choice

The primary purpose of a protective put is

• A) The increase in potential gains
• B) The guarantee of a higher return
• C) The elimination of downside risk
• D) The receipt of the option premium
• E) The increase in risk and thus an increase in returns

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Definitions:

Adult Population

The segment of the population that comprises individuals who are considered adults, typically based on reaching a specific age threshold.

Literate

The ability to read and write at a level sufficient for effective communication and consumption of information.

Social Overhead Capital

Basic infrastructure projects such as roads, power generation, and irrigation systems.

Developing Country

A nation with a lower level of material wealth, industrialization, and human development index compared to developed countries.