A Portfolio Consists of 800 Shares of Stock and 100

question 83

Multiple Choice

A portfolio consists of 800 shares of stock and 100 calls on that stock.If the hedge ratio for the call is 0.5.What would be the dollar change in the value of the portfolio in response to a $1 decline in the stock price

• A)+$700
• B)-$850
• C)-$580
• D)-$520

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Definitions:

Autonomy

The capacity to make an informed, uncoerced decision, often related to the concept of independence or self-determination.

Empathy

The ability to understand and share the feelings of another, placing oneself in another's situation.

Collectivistic Orientation

A philosophy that promotes the notion of interdependence.

Individualistic Orientation

A mindset or approach focused on the rights, significance, and achievements of the individual over those of the collective group.