A Hedge Ratio for a Put Is Always

question 26

Multiple Choice

A hedge ratio for a put is always

• A)equal to one.
• B)greater than one.
• C)between zero and one.
• D)between negative one and zero.

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Definitions:

Long-Run Cost Curve

A graph showing the lowest cost at which a firm can produce any given level of output in the long run, when all factors of production are variable.

Average Total Cost

The total cost of production (including fixed and variable costs) divided by the number of units produced, indicating the per-unit cost of production.

X-Inefficiency

Inefficiency in an organization's allocation of resources due to a lack of competitive pressure, often leading to higher costs and lower output.

Profit-Maximizing Output

The point of production where a company reaches its maximum profit potential.