If the Hedge Ratio for a Stock Call Is 0

question 31

Multiple Choice

If the hedge ratio for a stock call is 0.70, the hedge ratio for a put with the same expiration date and exercise price as the call would be

• A) 0.70.
• B) 0.30.
• C) −0.70.
• D) −0.30.
• E) −0.17.

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Definitions:

Friendly Relationships

Bonds between individuals characterized by mutual affection, support, and a positive regard, fostering a pleasant social environment.

ERG Theory

A motivational theory developed by Clayton Alderfer that categorizes human needs into three groups: Existence, Relatedness, and Growth.

Autonomy Support

The encouragement of self-initiative and independence in individuals by offering them choices and understanding their perspectives.

Basic Psychological Needs

Fundamental requirements for psychological well-being and growth, typically encompassing autonomy, competence, and relatedness.