If the Hedge Ratio for a Stock Call Is 0

question 21

Multiple Choice

If the hedge ratio for a stock call is 0.60, the hedge ratio for a put with the same expiration date and exercise price as the call would be

• A)0.60.
• B)0.40.
• C)-0.60.
• D)-0.40.

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Definitions:

Photoreceptor Cells

Specialized cells in the retina of the eye that respond to light, enabling vision by converting light into electrical signals.

Pupil

The opening in the center of the iris of the eye that controls how much light enters the eye.

Dilates

Refers to the action of something expanding or becoming wider, typically in the context of body parts such as pupils or blood vessels.

Constricts

Describes the process of becoming narrower, tightened, or to cause something to become smaller or more restricted.