SIE practice questioneasyPut options
What does an investor who buys a put option want the price of the underlying security to do?
- AIncrease slightly
- BDecrease✓ Correct answer
- CRemain unchanged
- DFluctuate wildly
Explanation
Why B — Decrease
A put option increases in value as the price of the underlying security falls, allowing the investor to profit. The other choices do not benefit the put buyer.
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