SIE practice questionmediumSpreads
Which statement describes a bear put spread?
- ABuying a put at a higher strike and selling a put at a lower strike✓ Correct answer
- BBuying a put at a lower strike and selling at a higher strike
- CSelling both a call and a put
- DBuying a call and a put at different strikes
Explanation
Why A — Buying a put at a higher strike and selling a put at a lower strike
A bear put spread buys the higher strike put, sells the lower, profits if stock declines. Other answers describe reverse spreads or unrelated strategies.
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