A Portfolio That Combines the Underlying Stock and a Short

question 20

Multiple Choice

A portfolio that combines the underlying stock and a short position in an option is called

• A)a risk arbitrage portfolio
• B)a hedge portfolio
• C)a ratio portfolio
• D)a two-state portfolio
• E)none of the above

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Definitions:

Managerial Effectiveness

The extent to which managers achieve desired outcomes and objectives efficiently through strategic planning, organization, and directing.

Self-Confidence

A belief in one’s own abilities and in achieving success, which can influence behaviors and attitudes positively.

Leader

A person who influences and guides others towards achieving a common goal, often demonstrating vision, initiative, and direction.

Power Orientation

An individual's or group's tendency to prioritize and value power, influence, and control within relationships or organizations.