Homemade Dividend Refers to the Process by Which an Investor

question 85

Multiple Choice

Homemade dividend refers to the process by which an investor ________.

• A) can take on more debt
• B) chooses between equity and debt
• C) can sell shares to create a dividend policy to suit his preferences
• D) reinvests dividend payments

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Definitions:

Buyer of a Put Option

An investor who acquires the right, but not the obligation, to sell a specified amount of an underlying asset at a predetermined price within a set time frame.

Underlying Asset

The financial asset upon which a derivative's price is based, including stocks, bonds, commodities, currencies, interest rates, and market indexes.

European Put Option

A financial contract that gives the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a predetermined price before or at a specified expiration date.

Underlying Asset

An asset over which options or other derivative instruments are based, which can include stocks, bonds, commodities, or currencies.