Options Sellers Who Are Delta-Hedging Would Most Likely

question 47

Multiple Choice

Options sellers who are delta-hedging would most likely

• A) sell when markets are falling.
• B) buy when markets are rising.
• C) sell when markets are falling and buy when markets are rising.
• D) sell whether markets are falling or rising.
• E) buy whether markets are falling or rising.

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Definitions:

Supply Chain

The system of organizations, people, activities, information, and resources involved in supplying a product or service to a consumer.

Markov Models

A statistical model used to model randomly changing systems where it is assumed that future states depend only on the current state and not on the sequence of events that preceded it.

Transitional Probabilities

The likelihood of moving from one state or condition to another, often used in the context of labor markets, health statuses, or economic conditions.

Promotion

An employee's upward advancement in the hierarchy of an organization.