You and Your Friend Created a Technology Start-Up

question 13

Multiple Choice

You and your friend created a technology start-up.Since its inception,it has become very successful and you've had to hire many employees.At what point will you realize that it has become,in Georg Simmel's terms,a large group?

• A) when you don't know everyone's name
• B) when formal job titles are created and formal hierarchies between employees emerge
• C) when you have to build cubicles for your employees' privacy
• D) when you begin issuing stock options to employees as part of their compensation package

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Definitions:

Hedge Ratio

A ratio used to measure the proportion of a position that is hedged or the amount of assets used to hedge a risk exposure.

Dynamic Hedging

Constant updating of hedge positions as market conditions change.

Delta Neutral

The value of the options portfolio is not affected by changes in the value of the underlying asset.

Elasticity

A measure of how much the demand or supply of a product or service changes in response to a price or income change.