SIE Exam Question 668: Answer and Explanation

Question: 668

____ Purchasing a put option while holding shares of the underlying stock from a previous purchase.

• A. Collar
• B. Spread
• C. Straddle
• D. Protective put

Correct Answer: D

Explanation:

In a protective put, an investor purchases a put option while holding shares of an underlying stock from a previous purchase.