You Have Determined That You Need -1,698 Call Options to Hedge

question 20

Multiple Choice

You have determined that you need -1,698 call options to hedge your stock portfolio. What should you do based on this information?

• A) buy 17 call option contracts
• B) buy 1,698 call option contracts
• C) write 17 call option contracts
• D) write 170 call option contracts
• E) write 1,698 call option contracts

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Definitions:

Annual Grass

A type of grass that completes its entire life cycle from seed to death within one year.

Monocotyledones

Also known as monocots, a group of flowering plants characterized primarily by having one embryonic seed leaf.

Anthophyta

The division of plants that includes all flowering plants, characterized by the production of flowers and seed-containing fruits.

Homologous Structures

Anatomical features in different species that are similar due to evolutionary origin, indicating a common ancestor.