An investor owns a share of stock worth $ 75 and buys a put option for a premium of $ 2 with a strike price of $ 65. What are the risk and return characteristics of the portfolio The:（）
A. portfolio has unlimited downside risk, but the upside potential is limited to $ 65.
B. portfolio’s downside risk is a price of $73, but there is no maximum to the upside potential.
C. portfolio’s downside risk is a price of $ 63, but there is no maximum to the upside potential.
参考答案：C
解析：
The investor is using a portfolio insurance ( long stock+long put) strategy. The maximum loss is limited to the strike price of the put option less the premium paid for the option. The maximum gain for the strategy is unlimited, as the stock could rise by an infinite amount and the investor will allow the put option to expire.