A Protective Put Written on a Portfolio (Rather Than a Single

question 16

Multiple Choice

A protective put written on a portfolio (rather than a single share) is known as

• A)portfolio insurance.
• B)a warrant.
• C)Black-Scholes.
• D)put-call parity.

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Definitions:

Annual Interest Tax Shield

The reduction in income taxes a company achieves through deductible interest expenses.

Coupon Rate

The annual interest rate paid by a bond, expressed as a percentage of the bond's face value.

Tax Rate

The percentage at which an individual or corporation is taxed, which can apply to income, capital gains, or property values.

Earnings Per Share

A measure of a company's profitability that calculates the portion of a company's profit allocated to each outstanding share of common stock.