Options Sellers Who Are Delta-Hedging Would Most Likely

question 47

Multiple Choice

Options sellers who are delta-hedging would most likely

• A) sell when markets are falling.
• B) buy when markets are rising.
• C) sell when markets are falling and buy when markets are rising.
• D) sell whether markets are falling or rising.
• E) buy whether markets are falling or rising.

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Definitions:

Classical Conditioning

A training approach characterized by making associations between a stimulus in the environment and one that occurs naturally, causing a conditioned behavior.

Social Setting

The physical and social context in which people live or in which something happens or develops.

Negative Punishment

A behavior modification technique involving the removal of a desirable stimulus following an undesired behavior to decrease the likelihood of the behavior’s occurrence.

Positive Punishment

Adding an unpleasant stimulus to decrease a behavior, part of operant conditioning in psychology.