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You Have Written a Call Option on 1 Share of Z

Question 48

Multiple Choice

You have written a call option on 1 share of Z stock that is worth $15.You expect the price of the stock to either move to $20 or $10 over the next year.How many shares of Z stock should you own to perfectly hedge your position on the call option? The strike price on the option is $15.


A) 2 shares
B) 1 share
C) .5 shares
D) none of the above

Correct Answer:

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