The Buyer of a Long Put Option

question 81

Multiple Choice

The buyer of a long put option:

• A)has a maximum loss equal to the premium paid.
• B)has a gain equal to but opposite in sign to the writer of the option.
• C)has maximum gain potential limited to the difference between the strike price and the premium paid.
• D)all of the above

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Definitions:

Working Memory

An intellectual capacity system with limitations, meant for short-duration information retention for processing requirements.

Implicit

Something understood or implied without being stated openly; often refers to unconscious attitudes or beliefs.

Sensory

Relating to or involving the senses or sensation.

Procedural Memory

A type of long-term memory involved in the unconscious memory of skills and how to perform certain procedures.