Question: While options allow an investor to possibly reduce his risk exposure by limiting downside risks, they themselves are risky. That is, options are riskier than
While options allow an investor to possibly reduce his risk exposure by limiting downside risks, they themselves are risky. That is, options are riskier than their underlying assets. Do you agree with this claim? Why or why not? Explain in detail. Suppose you came across insider information that is harmful to the companys stock you own. You decide to utilize this information to make money (this is illegalyou should not do itbut lets say hypothetically you do it). If you wanted to use options, how would you make the largest sum of money? Other than being caught by the SEC, what could spoil your investment strategy? Explain
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