If the Hedge Ratio for a Stock Call Is 0

question 15

Multiple Choice

If the hedge ratio for a stock call is 0.50, the hedge ratio for a put with the same expiration date and exercise price as the call would be

• A)0.30.
• B)0.50.
• C)-0.60.
• D)-0.50.
• E)-.17.

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Definitions:

P-Value

The probability of observing data at least as extreme as the data actually observed, under the assumption that the null hypothesis is true.

Null Hypothesis

A default hypothesis that there is no significant difference or effect, used as a starting point for statistical testing.

P-Value

The probability of observing test results at least as extreme as the results actually observed, under the assumption that the null hypothesis is true.

Confidence Interval

A range of values, derived from sample data, that is likely to contain the value of an unknown population parameter, with a specified level of confidence.