You Manage a Stock Portfolio with a Beta of 0

question 63

Multiple Choice

You manage a stock portfolio with a beta of 0.90 and a market value of $250 million. S&P 500 index call options with a delta of 0.53 are available at a strike price of 1,100. If the index is currently trading at 1,084, how many call options should you write?

• A) 3,705
• B) 3,859
• C) 3,534
• D) 3,916
• E) 4,102

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Definitions:

Stock of Capital

The total quantity of physical assets used in the production of goods and services in an economy.

Short-Run Aggregate Supply Curve

A graphical representation showing the relationship between the total supply of goods and services produced by an economy and the price level for those goods and services in the short term.

Long-Run Aggregate Supply Curve

A graphical representation showing an economy’s potential output level when all factors of production are fully utilized.

Labor Force

The total number of people available to work, including both the employed and those seeking employment but currently unemployed.