You Own 2,500 Shares of Jordan Co

question 18

Multiple Choice

You own 2,500 shares of Jordan Co. stock, which is currently, valued at $38 a share. The $40 put has a premium of $2.25 and a put delta of −.25. What position should you take in $40 put contracts to hedge your stock against a $1 decrease in price?

• A)buy 100 contracts
• B)buy 1,000 contracts
• C)buy 10,000 contracts
• D)write 100 contracts
• E)write 1,000 contracts

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Definitions:

Immediate Marketing Environment

This refers to the factors directly influencing a company's capability to serve its customers, including suppliers, intermediaries, customers, competition, and the public.

Macroenvironment

The external and uncontrollable factors that influence an organization's decision-making, and affect its performance and strategies, such as economic, demographic, political/legal, social/cultural, technological, and environmental forces.

Fewer Components

A streamlined approach to product design or manufacturing that minimizes the number of parts used.

Generational Cohorts

Groups of people born in the same period who share similar cultural experiences, attitudes, and values.