If You Thought Prices of Stock Would Be Rising Over

question 51

Multiple Choice

If you thought prices of stock would be rising over the next few months you may wish to __________________ on the stock.

• A) purchase a call option
• B) purchase a put option
• C) sell a futures contract
• D) place a short sale order

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Definitions:

Market

A group of buyers and sellers of a particular good or service.

Diminishing

A principle often referring to diminishing returns, where additional inputs result in progressively smaller increases in output.

Marginal Product

The additional output resulting from the use of one more unit of a production input, holding all other inputs constant.

Production Function

An economic model that describes the relationship between the inputs a firm uses and the output it creates.