A Riskless Hedge Can Best Be Defined as

question 28

Multiple Choice

A riskless hedge can best be defined as

• A) A situation in which aggregate risk can be reduced by derivatives transactions between two parties.
• B) A hedge in which an investor buys a stock and simultaneously sells a call option on that stock and ends up with a riskless position.
• C) Standardized contracts that are traded on exchanges and are "marked to market" daily,but where physical delivery of the underlying asset is virtually never taken.
• D) Two parties agree to exchange obligations to make specified payment streams.
• E) Simultaneously buying and selling a call option with the same exercise price.

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Definitions:

Loss Of Liberty

The deprivation of individual freedoms and rights, often occurring through legal, political, or military means.

English Colonists

Early settlers from England who established colonies in North America, including the thirteen colonies that became the United States.

Native Americans

Indigenous peoples of the United States, including those who were living in the land that is now the U.S. before European colonization.