An Investor Intends to Sell Their Holding of 5000 ANZ

question 35

Multiple Choice

An investor intends to sell their holding of 5000 ANZ shares next month and is concerned the share price may fall.Which of the following would be most suitable to hedge this transaction?

• A)Long calls
• B)Short calls
• C)Long puts
• D)Short puts
• E)Long SPI futures

---

Definitions:

Exact Specifications

Detailed and precise descriptions of the requirements for materials, products, or services.

General Description

A broad or overall outline of an object, situation, or set of conditions, often providing basic details without going into in-depth specifics.

Trade Custom

Established practices or patterns of behavior that are widely accepted and followed within a particular industry.

Implied Warranty

A legal assumption that a product will meet certain standards of quality and reliability without being explicitly stated.