The Hedge Ratio
A)Is the Size of the Long (Short)position $\frac { C _ { u T ^ { - } C _ { d T } } } { S _ { 0 } ( u - d ) }$

question 56

Multiple Choice

The hedge ratio

• A)Is the size of the long (short)position the investor must have in the underlying asset per option the investor must write (buy)to have a risk-free offsetting investment that will result in the investor perfectly hedging the option.
• B) \(\frac { C _ { u T ^ { - } C _ { d T } } } { S _ { 0 } ( u - d ) }\)
• C)Is related to the number of options that an investor can write without unlimited loss while holding a certain amount of the underlying asset.
• D)all of the options

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