You Own Shares of AZT Stock

question 4

Multiple Choice

You own shares of AZT stock. Which of the following strategies can you use to hedge your risk associated with a price decrease in AZT stock?
I. buy call options
II. write call options
III. buy put options
IV. write put options

• A)I only
• B)I and III only
• C)I and IV only
• D)II and III only
• E)II and IV only

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Definitions:

Methyl Ester

Organic compounds formed from the reaction of an acid with methanol, characterized by a methyl group attached to the ester functional group.

Carboxylic Acid

Organic acids characterized by the presence of at least one carboxyl group (-COOH), which gives them their acidic properties.

Hell-Volhard-Zelinsky

A chemical reaction that halogenates carboxylic acids at the alpha carbon with a bromine or chlorine in the presence of phosphorus.

Organic Product

A compound or material derived from living organisms, or synthetically produced to mimic such substances.