You Own Shares of AZT Stock

question 4

Multiple Choice

You own shares of AZT stock. Which of the following strategies can you use to hedge your risk associated with a price decrease in AZT stock?
I. buy call options
II. write call options
III. buy put options
IV. write put options

• A)I only
• B)I and III only
• C)I and IV only
• D)II and III only
• E)II and IV only

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Definitions:

Amazon

Amazon is a global technology giant, primarily known for its e-commerce platform, but also involved in cloud computing, digital streaming, and artificial intelligence.

Economies of Scale

The cost advantage that arises with increased output of a product, leading to a reduction in the per-unit cost.

Distribution Logistics

This focuses on the process of planning, implementing, and controlling the efficient flow and storage of goods from the point of origin to the point of consumption to meet customer requirements.

Economic Profit

A firm's total revenues minus its explicit and implicit costs, representing the profitability beyond the firm's opportunity costs.