If a client investor is holding a large number of listed shares on the ASX,intends to sell in three months' time and wishes to protect the value of the share portfolio,they may:
A) buy a futures contract based on the S&P/ASX.
B) sell a futures contract based on the S&P/ASX.
C) write a put option based on the S&P/ASX.
D) buy a call option based on the S&P/ASX.

Question

Quizplus · Accepted Answer

Selling a futures contract allows the investor to lock in a selling price for the shares, providing protection against a potential decline in the share portfolio's value.

If a Client Investor Is Holding a Large Number of Listed