​A Calculator May Not Be Used on This Part of the Examination

question 160

Multiple Choice

​A calculator may not be used on this part of the examination.
​The graph of consists of four line segments as shown below.Let g be the function given by .Use this information for Problems 26-28.
​
-What is ​? ​

• A)​4
• B)​2
• C)​6
• D)​-2

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Definitions:

Dynamic Hedging

A strategy that involves adjusting the hedge position dynamically as market conditions change, used to manage risk in trading portfolios.

Static Hedging

A financial strategy that involves setting up a position in options or other securities to mitigate risk, without needing to adjust the position frequently.

Capital Outlay

The amount of money spent on acquiring or improving fixed assets, such as buildings, equipment, and land.

Black-Scholes Option-pricing Model

A mathematical model for pricing European call and put options, using factors like the stock's price, exercise price, risk-free rate, and time to expiration.