Options allow investors to get rid of the risks they do not want and keep the ones they do want. can be used for hedging but not

Question

2 years ago

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Options allow investors to get rid of the risks they do not want and keep the ones they do want. can be used for hedging but not

for speculation. obligate the holder to sell the underlying asset at a predetermined price on or before a fixed date. allow investors to bet that the price of an underlying asset will rise but not that it will fall.

Business

1 answer:

Anna35 [415] · Answer 1 · 2022-07-31T15:10:03+03:00

Answer:

allow investors to get rid of the risks they do not want and keep the ones they do want

Explanation:

In the option, it permit the investor to get rid of the risk as they dont want also it keeps that one which they want

The other options are to be considered incorrect as in the second option, it is used for the speculation also, the third option is wrong as the holders of the options have the right but not the obligation, and the last option is incorrect as it is used for bet in the case when the price is decline or increase

Therefore the first option is correct