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:

Behavioral Perspective

An approach in psychology focusing on observable behaviors and the ways in which learning occurs through interactions with the environment.

Humanistic Potential

The inherent capacity for personal growth and achieving self-fulfillment, often emphasized in humanistic psychology.

Social-cognitive

Pertaining to the understanding of social interactions and the processing of social information through learning, observation, and cognition.

Cognitive Ability

The capacity to perform higher mental processes of reasoning, remembering, understanding, and problem solving.