What Is the Reason for Executing a Gamma Hedge

question 59

Multiple Choice

What is the reason for executing a gamma hedge?

• A)the volatility can change
• B)the stock price can make a large move
• C)the stock price moves are too small for a delta hedge to work
• D)there is no true risk-free rate
• E)none of the above

---

Definitions:

Employee-Of-The-Month

A recognition program in which an employee is honored for outstanding performance, contribution, or attitude over a specified period.

Gain Sharing

A compensation strategy where employees receive financial rewards based on improvements in the company's performance, meant to increase productivity and morale.

Pay-For-Performance

Pay-For-Performance is a compensation strategy where employees' compensation is directly linked to their performance or achievements.

Organizational Productivity

The measure of how efficiently and effectively an organization uses its resources to achieve its goals.