A Hedge Ratio of 0

question 30

Multiple Choice

A hedge ratio of 0.70 implies that a hedged portfolio should consist of ________.

• A) long .70 calls for each short stock
• B) long .70 shares for each long call
• C) long .70 shares for each short call
• D) short .70 calls for each long stock

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Definitions:

Tylenol

A brand name for acetaminophen, an over-the-counter medication used to reduce pain and fever.

Prn Analgesic

Medication that is taken "as needed" for pain, where "prn" is a Latin abbreviation for "pro re nata," meaning when the situation arises.

Open Reduction

A surgical procedure used to realign bones or joints after a fracture or dislocation, typically involving the use of hardware such as pins or screws.

Fibula

A long, thin bone located on the lateral side of the tibia in the lower leg.