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:

Gynecomastia

The enlargement of breast tissue in males, which can occur due to hormonal imbalances, medication side effects, or certain diseases.

Hormonal Changes

Hormonal changes refer to variations in the levels of hormones in the body, which can affect various bodily functions and stages of life, such as puberty, pregnancy, and menopause.

Late Bloomer

An individual who experiences physical or psychological development later than typically expected.

Menarche

The occurrence of the first menstrual cycle in a female, marking the beginning of reproductive capability.