You Are Considering Purchasing a Call Option with a Strike

question 24

Multiple Choice

You are considering purchasing a call option with a strike price of $35. The price of the underlying stock is currently $27. Without any further information, you would expect the hedge ratio for this option to be ________.

• A) negative and near 0
• B) negative and near −1
• C) positive and near 0
• D) positive and near 1

Understand the challenges in SCIS management, particularly related to integration issues with multi-vendor applications.

Understand the impact of highly digitized supply chains on company efficiency and revenue.

Recognize the critical role of technology users and proper needs assessment in the success of SCIS.

Identify the importance of event management systems, ERP systems, and the principle supply chain information requirements for effective decision-making.

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Definitions:

Relative Economic Conditions

Economic circumstances in one region or country as compared to another.

Long-Run Exposure

A type of currency risk faced by firms that operate internationally over an extended period.

Exchange Rate Risk

The potential for financial loss due to fluctuations in the exchange rate between two currencies.

Cross-Rate

An exchange rate between two currencies derived from their respective relations with a third currency.