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Please Answer true or false, also explain why in 2 lines. Derivatives: A call option and a put option are contractual obligations that require or
Please Answer true or false, also explain why in 2 lines.
- Derivatives: A call option and a put option are contractual obligations that require or mandate action by the investor before or on expiration. A futures contract is similar contractual obligation. Both options and futures provide for a leveraged return on the underlying assets return profile. If True, Explain
- Margin: Buying on margin means borrowing money from a broker, for example, to buy more securities than can be purchased with ones own money. By buying securities on margin, importantly, an investor minimizes both the upside potential and the downside risk of the investment. If true, explain.
- Short Selling. Short selling is the practice of selling securities that the seller does not own. The short seller borrows the securities sold through a broker and may be required to cover the short position at any time by the owner (via the broker). If false, explain.
- Regulation. Securities trading is regulated by the SEC, other governmental agencies, and through self-regulation of the exchangers. The majority of the important regulations have to do with insider fixed-income trading and blue-sky laws. If true, explain.
- Morningstar. Morningstar characterizes equity mutual funds by capitalization and by style/ from the standpoint of the investor, style, alternatively, can be viewed as ones investment philosophy. Style includes value, growth, momentum, constraint and fundamental core. If false, Explain.
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