A Hedge Ratio of 0

question 71

Multiple Choice

A hedge ratio of 0.70 implies that a hedged portfolio should consist of

• A) long 0.70 calls for each short stock.
• B) short 0.70 calls for each long stock.
• C) long 0.70 shares for each short call.
• D) long 0.70 shares for each long call.
• E) None of the options are correct.

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Definitions:

Carcinoma

A type of cancer that begins in the skin or in tissues that line or cover internal organs, often forming solid tumors.

Keloid

A raised scar that grows excessively beyond the boundary of the original wound, due to an overproduction of collagen.

Biopsy

A medical procedure that involves taking a small sample of tissue for examination to diagnose diseases.

Tympanic Membrane

The thin layer of tissue that separates the external ear from the middle ear, commonly known as the eardrum.