If the Hedge Ratio Is 0

question 44

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:

Insulin Injection

A medical procedure in which insulin is administered into the body using a syringe and needle, commonly used by individuals with diabetes to regulate their blood sugar levels.

Blood Sugar

The concentration of glucose present in the blood, crucial for energy production in the body.

Placebo

is a substance or treatment with no therapeutic effect given to a participant in a study as a control to test the efficacy of another treatment, or used to elicit a psychological benefit through the belief in the treatment.

Metronome

A device used by musicians that marks time at a selected rate by giving a regular tick sound.