You Own 1,200 Shares of Banner Co

question 63

Multiple Choice

You own 1,200 shares of Banner Co.stock that is currently priced at $42 a share.Given this price,the option delta for a $40 call option on this stock is .664.How many $40 call options do you need to hedge against a -$1 change in the price of the stock?

• A)buy 1,613 options
• B)buy 1,713 options
• C)buy 1,8.7 options
• D)write 1,713 options
• E)write 1,807 options

Acknowledge the role of investment in long-term financial planning and retirement preparation.

Recognize the significance of holding a broad portfolio of stocks for long-term investment benefits.

Understand the concept of market equilibrium and how prices adjust to equilibrate supply and demand.

Analyze the effects of external factors on market prices and quantities.

---

Definitions:

Approach-Avoidance Conflict

A psychological struggle experienced when an individual faces a decision involving aspects that are both appealing and dissuading at the same time.

Property Taxes

Levies on property that owners pay to local governments, based on the assessed value of their property.

Avoidance-Avoidance

A conflict situation in which a choice must be made between two unattractive goals or outcomes.

Incompatible Motivations

When two or more motives or desires conflict, making it challenging to satisfy them simultaneously.