Assume S = $33

question 10

Multiple Choice

Assume S = $33.00,σ = 0.32,r = 0.06,div = 0.01.You short 100 $35 strike calls at 68 days until expiration.Under a delta hedge position,what is your overnight profit/loss if the stock rises to $34.50?

• A) $9.23 loss
• B) $9.23 gain
• C) $7.62 loss
• D) $7.62 gain

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Definitions:

Postwar Strike Wave

A series of labor strikes that occurred in various industries across the United States immediately following World War I, reflecting workers' demands for better wages and working conditions.

President Truman

Harry S. Truman, the 33rd President of the United States, who served from 1945 to 1953, known for the Truman Doctrine and the decision to use atomic bombs on Japan.

Independence

The condition or quality of being self-governing and not under the control of external authority, often relating to nations achieving autonomy from colonial rule or oppressive governments.

1946

The year post-World War II characterized by significant political, economic, and social changes worldwide, including the beginning stages of the Cold War.