The way to protect a stock portfolio most in a bear market is to:
A)Buy stock index calls.
B)Buy stock index puts.
C)Write stock index calls.
D)Write stock index puts.

Question

Quizplus · Accepted Answer

Buying stock index puts allows the investor to profit from a decline in the market, thus offsetting losses in their portfolio. This is the best choice for protecting a stock portfolio in a bear market. A, C, and D involve writing options, which can be risky and not suitable for all investors.

The Way to Protect a Stock Portfolio Most in a Bear