Question

If you combine a long stock position with buying an at the money put option the resulting net payoff profile will resemble the payoff profile of a _______. a.long call b.short call c.short put d.long put

Answer 1

Option A is correct

Long Call

Step-by-step explanation:

If you combine a long stock position with buying an at the money put option the resulting net payoff profile will resemble the payoff profile of a long call

If long stock and long put is combined, upside potential is retained and downside loss is hedged, so it is a long call.