Suppose you own a share of company A. You expect the company’s price to increase. But you would like to hedge your risk.

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answerhappygod
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Suppose you own a share of company A. You expect the company’s price to increase. But you would like to hedge your risk.

Post by answerhappygod »

Suppose you own a share of company A. You expect the company’s
price to increase. But you would like to hedge your risk. At this
point, you have only invested in company A, rather than a broader
portfolio. Which of the following could enable you to do so?
a. buying a put on company A
b. selling a put on company A
c. shorting a tock with the same beta as company A so as to
eliminate systematic risk exposure
d. buying a call on company A
e. Selling a call on company A
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