Since Deltas Change as Stock Values Change, Portfolio Hedge Ratios

question 59

Multiple Choice

Since deltas change as stock values change, portfolio hedge ratios must be constantly updated in active markets. This process is referred to as

• A) portfolio insurance.
• B) rebalancing.
• C) option elasticity.
• D) gamma hedging.
• E) dynamic hedging.

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Definitions:

Stored Information

Information that is retained in the brain or another storage system for retrieval and use at a later time.

Sensory Memory

The shortest-term element of memory, it is the ability to retain impressions of sensory information after the original stimuli have ended.

Sensory Modalities

the different channels through which humans and animals perceive the environment, such as sight, sound, touch, taste, and smell.

Stored Information

Information that has been retained in the memory over time.