Which of the Following Statements About Put and Call Options

question 123

Multiple Choice

Which of the following statements about put and call options is true?

• A) They are traded only over-the-counter.
• B) They are a form of deferred equity financing by a firm.
• C) They can be used to lock in a gain or prevent a loss on a stock holding.
• D) They provide the seller with an opportunity to earn larger returns than simply buying or selling common stock.

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