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The Price of a Long Position of a Stock in Your

question 4

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The price of a long position of a stock in your portfolio is $20.You decide to buy a put with a strike price of $17.50 worth $2 and sell a call with a strike price of $22.50 also worth $2.Then you have created:


Definitions:

Regression Line

A line drawn through the set of datapoints that represents the best fit of the data according to a particular statistical criterion, often used in linear regression analysis.

Linear Relationship

A type of association where the change in one variable is directly proportional to the change in another variable.

Significance Level

The likelihood of incorrectly dismissing the null hypothesis in a statistical analysis, commonly represented by alpha, when it in fact holds true.

Regression Line

A straight line in a scatter plot that best fits the data points and shows the relationship between two variables in linear regression analysis.

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