Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. hello the answer is b but can you show me step by

hello the answer is B but can you show me step by step how the...

60.1K

Verified Solution

Question

Finance

image
hello the answer is B but can you show me step by step how the answer is B thank you !
1. The current price of a non-dividend paying stock is $30. Over the next six months it is expected to rise to $36 or fall to $26. Assume the risk-free rate is zero. An investor sells six-month call options with a strike price of $32. Which of the following hedges the position? A. Buy 0.6 shares for each call option sold B. Buy 0.4 shares for each call option sold C. Short 0.6 shares for each call option sold D. Short 0.4 shares for each call option sold

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Write a program that opens the file: \"Lab6A_Data\", reads all the values from the file, and...

Programming
Q

Design a muff coupling to connect two shafts transmitting 40 kW at 120 r.p.m. The permissible...

Mechanical Engineering
Q

On January 1, 2017, Fulton Inc. enters into a contract with Gibson to deliver goods. Gibson...

Accounting
Q

Explain how the procedure described in each case will affect the pressure in a closed...

Physics
Q

Given A CBA DAB CAB DBA are Right Angles Prove BC AD B D 2...

Geometry
Q

Part 1 Every year after a new car is purchased it loses 25 of its...

Basic Math
Q

A graphing calculator is recommended Use Simpson s Rule with n 10 to estimate the...

Algebra
Q

Question 42 of 60 Which of the following is the BEST way to list the...

Algebra
Q

On October 1, 2014, Adams Company paid $4,320 for a two-year insurance policy with the...

Accounting
Q

The information shown below relating to the ending inventory was taken at lower of cost...

Accounting
Q

Jumbo Enterprises plans to borrow R1 000 000 for one year. The stated interest rate...

Accounting
Q

Exercise 1-15 Preparing an income statement and a balance sheet LO 1-5 Topez Company was...

Accounting