Instructions: Please Define the Following Key Terms

question 45

Essay

Instructions: Please define the following key terms. Show Who? What? Where? When? Why Important?
prophets

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Definitions:

Hedge Ratio

The ratio of the size of a position in a hedging instrument to the size of the position being hedged, used to minimize risk.

Dollar Exposure

The extent to which a company or investor is affected by changes in the value of the U.S. dollar against foreign currencies.

Call Delta

An option's sensitivity measure that indicates how much the price of the call option is expected to change in response to a one-point change in the price of the underlying asset.

Two-State

Usually references a model involving two possible outcomes or states, often used in finance to model investment under uncertainty.