Which derivative security gives the holder the right to sell an underlying asset at a pre-specified strike price before expiration?
ACall Option
BPut Option
CFutures Option
DForward Swap
Explanation
• A Put Option grants the holder the right (without obligation) to sell an underlying asset at the strike price.
• Investors purchase put options when hedging downside risk or speculating on price declines.
• If asset price falls below strike price, the put option moves ‘in the money’.
Exam Relevance
- Topic: Financial Markets
- Subtopic: Derivatives

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