A Protective Put Is a Strategy in Which an Investor

question 37

True/False

A protective put is a strategy in which an investor with a long position in stock buys one or more puts.

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Definitions:

Short-term Note

A debt instrument with a maturity of one year or less, used by businesses and governments to finance temporary needs.

Merchandise Purchases Budget

A financial plan detailing the amount to be spent on purchasing goods for resale in a future period.

Safety Stock

An additional quantity of an item held in inventory to reduce the risk of stockouts.

Direct Materials

Raw materials that are directly attributable to the product being manufactured and can be easily identified and measured.