A Hedge Strategy Known as a Collar Agreement Involves the Simultaneous

question 83

Multiple Choice

A hedge strategy known as a collar agreement involves the simultaneous

• A) Purchase of an in-the money put and purchase of an out-of-the-money call on the same underlying asset with same expiration date and market price.
• B) Sale of an out-of-the money put and sale of an out-of-the-money call on the same underlying asset with same expiration date and market price.
• C) Purchase of an in-the money put and purchase of an in-the-money call on the same underlying asset with same expiration date and market price.
• D) Purchase of an out-of-the money put and sale of an out-of-the-money call on the same underlying asset with same expiration date and market price.
• E) Sale of an in-the money put and purchase of an in-the-money call on the same underlying asset with same expiration date and market price.

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