If an Asset Price Declines, the Investor with a ________

question 45

Multiple Choice

If an asset price declines, the investor with a ________ is exposed to the largest potential loss.

• A) long call option
• B) long put option
• C) long futures contract
• D) short futures contract

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Definitions:

Disbursements

Money paid out by a business or organization for various purposes, including expenses, investments, and dividends.

Average Daily Receipts

The average amount of cash that a business receives on a daily basis, calculated over a specific period.

Cheques

Written, dated, and signed instruments that direct a bank to pay a specific sum of money to the bearer or a designated party.

Clearing Times

The time period it takes for a financial transaction to be processed and settled.