Collar versus Protective Put

A Collar provides protection against down side risk, as does a Protective Put.

The question is when the focus is on down side risk, when should I prefer one over the other ?

Your assistance will be appreciated.

A collar is cheaper.

To achieve that cheapness, you give up some upside gain.

Thank you.

More directly though, given the chance to down-side protect a position, which of the two would one choose: a protective put or a collar? See Reading 15, EOC, Question 11. I think a collar could also have been the answer?

The answer depends on how much you want to spend.

On a real exam question, they’ll make that clear.

Thank you. See Reading 15, Qu 11. Why the answer is A but NOT C is unclear to me.

My copy says that the answer is C.

:sunglasses: My bad. I meant to say why is A incorrect. Sorry for the mix up

Hopewell wants to keep the potential upside; that’s why a collar is inappropriate.