SIE practice questionhardBear spread
An investor establishes a bear put spread by:
- ABuying a higher strike put and selling a lower strike put✓ Correct answer
- BBuying a lower strike call and selling a higher strike call
- CBuying a lower strike put and selling a higher strike put
- DBuying and selling calls at the same strike price
Explanation
Why A — Buying a higher strike put and selling a lower strike put
A bear put spread is constructed by buying a put with a higher strike and selling a lower strike put. The other options describe bull spreads or unrelated strategies.
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