You Own Shares of a Stock and Believe the Stock

question 50

Multiple Choice

You own shares of a stock and believe the stock price will increase in the future. However, you realize the stock price could decline and want to hedge that risk. Which one of the following option positions should you take to create the desired hedge?

• A)buy a call
• B)sell a call
• C)buy a put
• D)sell a put
• E)none of the above

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Definitions:

Positive Reinforcement

Strengthens a behaviour by making a desirable consequence contingent on its occurrence.

Force-Coercion

A change strategy that involves using power to induce change through pressure or the use of authority, often leading to compliance but not necessarily agreement.

Political Manoeuvring

The strategic and often subtle actions taken within organizational or governmental contexts to gain advantage, influence decisions, or achieve specific outcomes.

Direct Forcing

A strategy where one party uses their power or authority to achieve their desired outcome without seeking compromise.