You Own Shares of AZT Stock

question 4

Multiple Choice

You own shares of AZT stock. Which of the following strategies can you use to hedge your risk associated with a price decrease in AZT stock?
I. buy call options
II. write call options
III. buy put options
IV. write put options

• A)I only
• B)I and III only
• C)I and IV only
• D)II and III only
• E)II and IV only

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Definitions:

Instrumental Learning

A learning process in which behavior is modified by the consequences it generates, often involving rewards or punishments to increase or decrease the behavior's occurrence.

Mere Repeated Exposure

The phenomenon by which people tend to develop a preference for things merely because they are familiar with them.

Attitude Polarization

The finding that people’s attitudes become more extreme as they reflect on them

Affective Forecasting

The process of predicting how one will feel in the future, often inaccurately anticipating the emotional impact of future events.