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.

---

Definitions:

Price Fixing

An illegal agreement among competitors to control the price of a product or service.

Sherman Act

A landmark federal statute in the field of antitrust law prohibiting monopolistic practices and promoting competition.

Sherman Act

A foundational United States antitrust law passed in 1890 aiming to prohibit monopolies and promote competition in the marketplace.

Clayton Act

A U.S. law enacted in 1914 aimed at promoting competition and preventing antitrust practices.