If the Hedge Ratio for a Stock Call Is 0

question 52

Multiple Choice

If the hedge ratio for a stock call is 0.50, the hedge ratio for a put with the same expiration date and exercise price as the call would be

• A)0.30.
• B)0.50.
• C)-0.60.
• D)-0.50.

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Definitions:

Meaningful

Significantly important or valuable, often in a way that is personal or impactful to an individual or community.

Mark To Market

An accounting method that assesses the value of assets based on their current market prices.

Valuation

The process of determining the current worth of an asset or a company.

Market Prices

Refers to the current price at which an asset or service can be bought or sold in a given market.