If the hedge ratio for a stock call is 0.70, the hedge ratio for a put with the same expiration date and exercise price as the call would be
A) 0.70.
B) 0.30.
C) −0.70.
D) −0.30.
E) −0.17.

Question

Quizplus · Accepted Answer

The hedge ratio for a put option is the negative of the call option's hedge ratio minus 1. Therefore, if the call's hedge ratio is 0.70, the put's hedge ratio would be -0.30 (i.e., 0.70 - 1 = -0.30).

If the Hedge Ratio for a Stock Call Is 0