To provide insurance against declining prices on previously purchased stock, an investor could buy a put.
Investors buy put options as a type of insurance in order to protect other investments. So, in this regard, they may buy enough puts to cover their holdings of the underlying asset.
Then, if there is a depreciation in the price of the underlying asset, the investor can sell their holdings at the strike price. Puts are considered to be less risky than a stock because the most you can lose is the premium you paid for the put.
Thus, investors buy a put option to increase the profit from a stock's decline.
Hence, option D is correct.
To learn more about investors here:
https://brainly.com/question/10892697
#SPJ4
