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:

Cash Investments

Financial assets such as stocks, bonds, or real estate purchased with the expectation of generating a return on investment.

Statement of Cash Flows

A financial statement detailing the impact of alterations in balance sheet accounts and income on cash and cash equivalents, segmented into operating, investing, and financing activities.

Stockholders

Individuals or entities that own one or more shares of stock in a corporation, making them owners of a portion of the company.

Statement of Retained Earnings

A financial statement that outlines the changes in retained earnings for a specified period.