You Own 1,000 Shares of ABC Stock at a Price

question 75

Multiple Choice

You own 1,000 shares of ABC stock at a price of $50 per share. A put option is priced at $0.56 and has an option delta of -0.1614. The stock price is expected to fall to $49. To hedge your stock portfolio, how many put option contracts you need?

• A) Buy 124
• B) Buy 62
• C) Sell 62
• D) Sell 31
• E) Undetermined due to insufficient information

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Definitions:

Machine Pacing

The rate or speed at which work is expected to be completed, dictated by the automated systems or machinery used in the production process.

Task Repetition

The repeated execution of a particular task or set of tasks, often leading to efficiency improvements but sometimes resulting in boredom or strain.

Assembly Job

Employment that involves putting together components or parts, often in a manufacturing or production line setting.

Accident-Prone

A tendency to be more likely to experience accidents than the average person.