A Delta-Hedged Position Is One in Which the

question 24

Multiple Choice

A delta-hedged position is one in which the

• A)combined spot and derivatives positions have a delta of one.
• B)spot position has a delta of zero.
• C)derivatives position has a delta of zero.
• D)combined spot and derivatives positions have a delta of zero.
• E)combined spot and derivatives positions have a gamma of zero.

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Definitions:

Targeted Net Profit

The specific amount of net income that a company aims to achieve within a certain period as part of its financial goals.

Selling Price Per Unit

The amount of money charged for each unit of a product or service sold.

Contribution Margin

The amount of revenue remaining after deducting variable costs, used to cover fixed expenses and generate earnings.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.