You Own 4,800 Shares of a Stock That Is Currently

question 57

Multiple Choice

You own 4,800 shares of a stock that is currently priced at $34 a share. Given this price, the option delta for a $30 call option on this stock is .955. How many $30 call option contracts do you need to hedge against a −$1 change in the price of the stock?

• A)buy 50 option contracts
• B)buy 503 option contracts
• C)write 50 option contracts
• D)write 503 option contracts
• E)write 5,026 option contracts

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Definitions:

Make Deposits Window

A feature in accounting software where users can record and manage the deposit of funds into bank accounts.

Journal Entry

A record of a business transaction in an accounting system that affects at least two accounts, one debit and one credit.

Debits Checking

The process of recording or deducting sums of money from a checking account, based on transactions made.

Credits Undeposited

Funds received by a company that have not yet been deposited into the bank account.