You Are Considering Purchasing a Call Option with a Strike

question 24

Multiple Choice

You are considering purchasing a call option with a strike price of $35. The price of the underlying stock is currently $27. Without any further information, you would expect the hedge ratio for this option to be ________.

• A) negative and near 0
• B) negative and near −1
• C) positive and near 0
• D) positive and near 1

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Definitions:

Arterial Blood Gas

A test that measures the amounts of oxygen and carbon dioxide in the arterial blood, used to assess the adequacy of oxygenation and ventilation.

Metabolic Acidosis

A condition characterized by an increase in acidity in the blood and body tissues, often due to the body producing too much acid or the kidneys not removing enough acid.

Acid-Base Imbalance

A disruption in the balance of acid and alkaline compounds in the body, potentially leading to health complications if not corrected.

Alcoholism

A chronic disease characterized by uncontrolled drinking and preoccupation with alcohol, leading to physical and psychological dependence.