Which of the Following Is Correct to Complete the Formula $\times$

question 70

Multiple Choice

Which of the following is correct to complete the formula for ascertaining the number of option required to hedge an equity portfolio?
Change in stock price $\times$ Shares = Option __________ $\times$ Number of Options

• A) Delta
• B) Beta
• C) Gamma
• D) Rho
• E) Theta

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Definitions:

Statement of Cash Flows

A financial statement that provides an aggregate data regarding all cash inflows a company receives from its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given period.

Operating Activities

Transactions and events that impact the net income of a business, primarily related to its core operations.

Indirect Method

A way of reporting cash flows from operating activities in the cash flow statement, starting with net income and adjusting for non-cash transactions.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value over time.