Which One of the Following Can Be Used to Replicate

question 79

Multiple Choice

Which one of the following can be used to replicate a protective put strategy?

• A)riskless investment and stock purchase
• B)stock purchase and call option
• C)call option and riskless investment
• D)riskless investment
• E)call option, stock purchase, and riskless investment

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Definitions:

Sales Discounts

A reduction offered by a seller on the list price of a product or service as an incentive for buyers, usually applied to promote sales, clear out inventory, or recognize volume purchases.

General Journal

A primary accounting record used to keep track of all business transactions not recorded in specialized journals, using the double-entry accounting method.

Periodic Inventory System

An inventory system that updates inventory balances at specific intervals instead of continuously, often requiring a physical count.

General Journal

A primary accounting record where financial transactions are chronologically recorded before being posted to specific accounts in the general ledger.