Put options are financial contracts that give the option buyer the right, but not the obligation, to sell a specified amount of an underlying security at a specified price within a specified time frame. This is often used as a protective strategy by investors who are concerned about potential losses in the underlying stock. When an investor buys a put option, they are essentially securing the right to sell their stock at a set price, regardless of how far the market price falls. This means that if the stock price does fall, the investor can exercise their put option and sell their stock at the higher, predetermined price, thereby limiting their losses. The cost of this protection is the premium paid for the put option. Therefore, buying put options is a strategy that can effectively protect investors from the downside risk of stock prices.\n\nChoice B is incorrect. Selling put options would not be an appropriate strategy to protect against a decrease in stock prices. When you sell a put option, you are obligated to buy the underlying asset at the strike price if the buyer decides to exercise their right. If stock prices fall, this could result in significant losses as you would be forced to buy the asset at a higher price than its current market value.\n\nChoice C is incorrect. Buying call options would also not provide protection against falling stock prices. A call option gives the holder the right but not obligation to buy an asset at a specified price within a certain period of time. If stock prices fall, this option becomes worthless as it would be more cost-effective for investors to purchase shares directly from the market at their lower price.\n\nChoice D is incorrect. Selling call options does not protect against downside risk either; instead, it limits upside potential while providing some income through premiums received from selling these options. In case of falling stock prices, while there may be no direct loss due to this strategy (as calls expire unexercised), it offers no protection against the decline — the investor still faces the full downside risk of the underlying position.