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Portfolio a Consists of 150 Shares of Stock and 300

question 28

Multiple Choice

Portfolio A consists of 150 shares of stock and 300 calls on that stock.Portfolio B consists of 575 shares of stock.The call delta is 0.7.Which portfolio has a higher dollar exposure to a change in stock price?


Definitions:

Behavioral Learning

A theory that explains human learning and behavior through the association between stimuli and responses, emphasizing the role of reinforcement.

Cognitive Learning

Refers to the mental process of acquiring knowledge and understanding through thought, experience, and the senses, emphasizing the role of the brain in processing information.

Behavioral Learning

A theory that proposes that learning is a process of adapting behavior based on experiences and interactions.

Thriftiness

The quality of being careful about spending money, prioritizing savings and efficient use of available financial resources.

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