A Hedge Ratio of 0

question 41

Multiple Choice

A hedge ratio of 0.70 implies that a hedged portfolio should consist of

• A) long 0.70 calls for each short stock.
• B) short 0.70 calls for each long stock.
• C) long 0.70 shares for each short call.
• D) long 0.70 shares for each long call.
• E) none of these.

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Definitions:

Direction And Strength

In psychology, often refers to the orientation and intensity of behaviors or attitudes.

Darley And Latané

Darley and Latané are known for their research in psychology, notably the bystander effect, which studies the conditions under which people are more or less likely to help others in emergencies.

Distressing Situation

A situation or environment that causes emotional or mental discomfort.

Early Schools

Refers to historical approaches and schools of thought in psychology, such as structuralism, functionalism, and psychoanalysis, which helped shape the field.