Find the Hedge Ratio for a Put Option on €10,000

question 59

Multiple Choice

Find the hedge ratio for a put option on €10,000 with a strike price of $15,000. In one period the exchange rate (currently S($/€) = $1.50/€) can increase by 60% or decrease by 37.5% .

• A)-15/49
• B)8/13
• C)-5/13
• D)15/49

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Definitions:

Formal Charge

A concept in chemistry that represents the charge assigned to an atom in a molecule, assuming that electrons in all chemical bonds are shared equally between atoms, irrespective of electronegativity.

Nitrogen Atoms

Atoms that have five electrons in their outer shell and are essential components of amino acids, proteins, and nucleic acids.

Non-Zero Formal Charges

The scenario in which atoms within a molecule have a formal charge other than zero, indicating an unequal distribution of electrons.

Sugar Consumption

The amount of sugar ingested by an individual or population within a specified time period.