Explain How Options Can Be Used to Manage Risk

question 38

Essay

Explain how options can be used to manage risk.Provide an example using a call option and another example using a put option.

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Definitions:

Utterances

Spoken words, statements, or vocal sounds that convey meaning and are a fundamental unit of speech in linguistics.

Imitation

The act of copying or mimicking the actions, speech, or behavior of others as a method of learning or social interaction.

Indirect Commands

Instructions or commands that are not expressed directly, often used in communication to suggest or imply what should be done without stating it openly.

Grammatical Errors

Mistakes made in the use of grammar, affecting the correctness and clarity of sentences.