If the Hedge Ratio for a Call Option Is 0

question 14

Multiple Choice

If the hedge ratio for a call option is 0.4 and you are short 100 shares of the underlying stock, which of the following actions would result in a risk-free hedge?

• A)Buy 400 calls on the stock.
• B)Buy 40 calls on the stock.
• C)Buy 250 calls on the stock.
• D)Sell 400 calls on the stock.

Identify strategies and actions that can undermine or support the collective bargaining process.

Understand the significance of cost analysis and resistance points in the negotiation process.

Understand different types of bargaining strategies, including distributive and integrative bargaining.

Identify and describe the factors influencing bargaining power and negotiation outcomes.

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Definitions:

Representativeness Heuristic

A cognitive shortcut that involves judging the probability of an event by how much it resembles what we consider to be a typical example of that event.

Availability Heuristic

A quick-thinking process that depends on the first examples that pop into someone's head when they are considering a particular subject, idea, approach, or choice.

Relative Comparisons

The act of evaluating something in relation to another similar item.

Availability Heuristic

A cognitive shortcut that relies on the immediate examples that come to a person’s mind when evaluating a specific topic, concept, method or decision.