A ________ option is an option to purchase a specified number of shares of a stock on or before some future date at a specified price, whereas a ________ option is an option to sell a specified number of shares of a stock on or before some future date at a specified price. ________ are purchased if the stock price is expected to fall.
A) put; call; Puts
B) call; put; Puts
C) put; call; Calls
D) call; put; Calls

Question

Quizplus · Accepted Answer

A call option gives the holder the right to buy a stock at a specified price, while a put option gives the holder the right to sell a stock at a specified price. Puts are bought when a decline in the stock price is anticipated.

A ________ Option Is an Option to Purchase a Specified