An investor may reduce risk by simultaneously purchasing a stock and a put option.

Name: An investor may reduce risk by simultaneously purchasing a stock and a put option.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Purchasing a put option along with a stock can reduce risk by providing the investor with the right to sell the stock at a predetermined price, thus offering protection against a decline in the stock's value.

An Investor May Reduce Risk by Simultaneously Purchasing a Stock