SIE practice questioneasyPut options
If an investor buys a put option, which right does this contract provide?
- AThe obligation to buy stock if assigned
- BThe right to buy stock at the strike price
- CThe obligation to sell stock if exercised
- DThe right to sell stock at the strike price✓ Correct answer
Explanation
Why D — The right to sell stock at the strike price
Buying a put gives the holder the right, but not the obligation, to sell shares at the strike price. B describes calls, while C and D confuse rights with obligations, which apply to sellers (writers), not buyers.
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