Business, 30.12.2019 22:31 wolfking800

You own $75,000 worth of stocks, and you are worried the price may fall by year end in 6 months. you are considering using either puts or calls to hedge the position. given this, which of the following statements is (are) correct?

i. one way to hedge your position would be to buy puts
ii. one way to hedge your position would be to write calls
iii. if major stock price declines are likely, hedging with puts is probably better than hedging with short calls

a. i only
b. ii only
c. i and ii only
d. i, ii, and iii

Answers: 3

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You own $75,000 worth of stocks, and you are worried the price may fall by year end in 6 months. you...