The Current Stock Price of Alcoco Is $70, and the Stock

question 29

Multiple Choice

The current stock price of Alcoco is $70, and the stock does not pay dividends. The instantaneous risk-free rate of return is 6%. The instantaneous standard deviation of Alcoco's stock is 40%. You want to purchase a put option on this stock with an exercise price of $75 and an expiration date 30 days from now. According to the Black-Scholes OPM, you should hold ________ shares of stock per 100 put options to hedge your risk.

• A) 30
• B) 34
• C) 69
• D) 74

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Definitions:

Team Cohesiveness

The degree to which members of a team are drawn together and feel loyalty and unity towards the group.

Soccer Teams

Groups of individuals who come together to compete in the sport of soccer, demonstrating teamwork, strategy, and physical skill.

Cohesive Groups

Groups characterized by strong bonds and a high level of commitment among members, leading to a unified entity.

Consequences

The results or outcomes that follow from actions, decisions, or behaviors, which can be positive, negative, or neutral.