Since Deltas Change as Stock Values Change, Portfolio Hedge Ratios

question 59

Multiple Choice

Since deltas change as stock values change, portfolio hedge ratios must be constantly updated in active markets. This process is referred to as

• A) portfolio insurance.
• B) rebalancing.
• C) option elasticity.
• D) gamma hedging.
• E) dynamic hedging.

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Definitions:

Perceived Dynamism

The extent to which an entity such as an organization, person, or product is viewed as progressive, innovative, and vigorous.

Perceived Trustworthiness

The degree to which an individual or entity is believed to be reliable, credible, and honest by others.

Ethical

Pertaining to morals, principles of right and wrong, or the study of these concepts.

Twist Evidence

The deliberate manipulation or alteration of facts or data to support a particular viewpoint or argument.