Which of the Following Forms of Hedging Requires the Use

question 9

Multiple Choice

Which of the following forms of hedging requires the use of options?

• A)delta hedging
• B)vega hedging
• C)gamma hedging
• D)credit risk hedging
• E)none of the above

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Definitions:

Five-day Week

A common work schedule that consists of five working days, usually Monday through Friday, followed by a two-day weekend.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, recognizing the decrease in the value of the asset over time.

Adjusting Entry

An accounting entry made at the end of a period to assign income and expenses to the period in which they actually occurred.

Equipment

Tangible assets used in operations, such as machinery or office hardware, that have a useful life longer than one reporting period.