The hedge ratio or delta measures the sensitivity of the value of one asset relative to the value of another asset.

Question

Quizplus · Accepted Answer

The statement is true. The hedge ratio or delta is commonly used in options trading to measure how much the value of an option will change in relation to changes in the underlying asset's price. It can also be used in other forms of hedging to determine how much of one asset needs to be held in order to offset the risk of another asset.

The Hedge Ratio or Delta Measures the Sensitivity of the Value