Using an Option to Reduce the Risk of a Portfolio

question 24

Multiple Choice

Using an option to reduce the risk of a portfolio is called ________, while using options to bet on the direction of the market or an asset is called ________.

• A)verification, hedging
• B)speculation, hedging
• C)hedging, verification
• D)hedging, speculation

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Definitions:

Dendrites

Branch-like extensions of neurons that receive signals from other neurons and conduct them toward the cell body.

Transmit Information

The process of sending data from one place or individual to another, allowing for communication and understanding.

Receive Information

The process of acquiring data or knowledge through various means such as reading, listening, observing, or experiencing.

Correct Order

The proper or desired arrangement of objects, tasks, or priorities according to specific criteria or rules.