This does not necessarily mean that options are less risky than spot or futures positions. Options can,

Question:

This does not necessarily mean that options are less risky than spot or futures positions.

Options can, in fact, be riskier than other investments since they exist for only a limited period of time and are leveraged investments (i.e., their value is only a fraction of the underlying security). To compare an option position to a spot position one must consider an equal dollar investment in the two positions over a common period of time.

 LO.1

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Financial Markets And Institutions

ISBN: 9781259919718

7th Edition

Authors: Anthony Saunders, Marcia Cornett

Question Posted: