Explain How Options Can Be Used to Manage Risk

question 38

Essay

Explain how options can be used to manage risk.Provide an example using a call option and another example using a put option.

Understand the various types of charts and graphs used in behavioral and social sciences to illustrate data.

Understand and identify different measures of variability.

Calculate the range of a given set of scores.

Understand the concept and calculation of variance.

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Definitions:

Fractures

Breaks or cracks in rock due to physical stress exceeding the strength of the rock, which can occur without the movement of the rock on either side of the break.

Carbonate Mineral

is a type of mineral consisting primarily of carbonate ions in combination with metal ions, common in rocks like limestone and dolomite.

Effervesces

Describes the process of fizzing or bubbling, often due to a chemical reaction releasing gas.

Dilute HCl

A solution of hydrochloric acid and water that is less concentrated than the acid's pure form, often used in chemical reactions and tests.