The Practice of Using Options or Dynamic Hedging Strategies to Provide

question 61

Multiple Choice

The practice of using options or dynamic hedging strategies to provide protection against investment losses while maintaining upside potential is called ________.

• A) trading on gamma
• B) index optioning
• C) portfolio insurance
• D) index arbitrage

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Definitions:

Selected Accounts

Selected accounts are specific accounts chosen for review or analysis, often for the purpose of financial reporting or audit.

Owner's Equity

The residual interest in the assets of the enterprise after deducting liabilities, essentially the net worth of the company attributable to the owners.

Liabilities

Financial obligations or debts that a company owes to others, such as loans, accounts payable, and mortgages.

Assets

Resources owned by a company that have economic value and can be converted into cash or are expected to generate income.