Which of the Following Is Equivalent to a Short Position

question 14

Multiple Choice

Which of the following is equivalent to a short position in a European put option?

• A) A short position in a cash-or-nothing put option plus a long position in an asset-or-nothing put option
• B) A long position in an asset-or-nothing put option plus a long position in a cash-or-nothing put option
• C) A long position in an asset-or-nothing call option plus a long position in a cash-or-nothing call option
• D) A long position in an asset-or-nothing call option plus a short position in a cash-or-nothing call option

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Definitions:

Decay

The natural process of decomposition or decline in quality, strength, or vigor over time.

Encoding Failure

A situation in which information fails to be stored into long-term memory, leading to the inability to recall it later.

Elaboration Failure

The inability to add detail or supplement information to a memory or concept, often leading to a lack of depth in understanding or recall.

Retroactive Interference

A process where new information interferes with the ability to recall older information.