You Believe the Price of a Stock Is Going to Decline

question 6

Multiple Choice

You believe the price of a stock is going to decline within the next three months.Which one of the following option payoff profiles will reflect a profit if your belief is correct?

• A)buying a call
• B)selling a call
• C)buying a put
• D)selling a put

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Definitions:

Effective Conditioning

A learning process in which a response becomes more frequent or predictable in a given environment due to reinforcement.

CS Precedes US

In classical conditioning, the conditioned stimulus (CS) is presented before the unconditioned stimulus (US) to establish a conditioned response.

0.5 Seconds

A time measurement equal to half a second, often used in various scientific and contextual scenarios to describe very short durations.

Relearning

The process of learning material or skills that were previously learned and then forgotten.