SIE Exam Question 1033: Answer and Explanation

Question: 1033

Which of the following investment strategies are profitable in a rising stock market?

(1) Buying a call

(2) Buying a put

(3) Selling a put

(4) Selling a call

• A. (1) and (3) only
• B. (1) and (4) only
• C. (2) and (3) only
• D. (2) and (4) only

Correct Answer: A

Explanation:

Buying a call and selling a put are bullish strategies. Investors choose these options when they expect the stock market to rise.