The Black-Scholes Hedge Ratio for a Long Call Option Is

question 74

Multiple Choice

The Black-Scholes hedge ratio for a long call option is equal to ________.

• A) N(d₁)
• B) N(d₂)
• C) N(d₁) − 1
• D) N(d₂) − 1

---

Definitions:

Watson

Psychologist John B. Watson, known as the father of behaviorism, emphasized the study of observable behavior.

Thorndike

An American psychologist known for his work on learning theory that led to the development of operant conditioning within behaviorism.

Operant Conditioning

A method of learning that occurs through reinforcements and punishments for behavior, influencing the likelihood of that behavior being repeated.

Higher-Order Conditioning

A form of learning in which a stimulus is first made meaningful through classical conditioning. Then, another stimulus is paired with the first, causing the second stimulus to elicit the conditioned response even in the absence of the first.