A prominent asset management firm, XYZ Capital, has been actively managing a portfolio that aims to generate stable returns while minimizing downside risk. The portfolio predominantly comprises equities, but due to recent market fluctuations, the firm's risk manager is exploring the implementation of derivatives as a strategic risk management tool.

The risk manager is considering the use of a protective put strategy on a selection of high-volatility stocks within the portfolio. This strategy involves purchasing put options with a strike price slightly below the current market price of the underlying stocks.

XYZ Capital’s chief investment officer is particularly interested in understanding the implications of using this strategy on the potential returns versus the cost of the options. Which of the following statements accurately describes the implications of the protective put strategy as considered by the risk manager?