Buying a call option gives the investor the right to purchase the stock at a fixed price (strike price). If the stock’s price rises significantly, the value of the call option increases, allowing the investor to profit.
B is correct because a call option profits directly from a stock price increase.
A is incorrect because a put option profits from a stock price decline.
C and D are incorrect because selling options limits profit potential and exposes the seller to significant risk if the stock moves unfavorably.
[Reference: SIE Study Guide, Chapter 8: Options Strategies, , ]
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