If the Hedge Ratio Is 0

question 96

Multiple Choice

If the hedge ratio is 0.50,this indicates that the portfolio should hold

• A) Two shares of stock for every call option written.
• B) One share of stock for every two call options written.
• C) Two shares of stock for every call option purchased.
• D) One share of stock for every two call options purchased.
• E) Two call options for every put option written.

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Definitions:

Contract Revenue

Revenue recognized by a company from contracts for the sale of goods or services, often recognized over the period of the contract based on the completion or delivery of services/goods.

IFRS

International Financial Reporting Standards are a set of accounting standards developed by the International Accounting Standards Board that are becoming the global standard for the preparation of public company financial statements.

Recoverable Costs

Expenditures that a company expects to recover in the future through tax deductions, reimbursements, or as contracts costs.

Critical Event

A significant occurrence or change that impacts an organization's operations or decision-making process.