The current price of a non-dividend paying stock is $38. Over the next six months it is expected to rise or fall by 10%.
Posted: Tue Jan 18, 2022 12:58 pm
The current price of a non-dividend paying stock is $38. Over the next six months it is expected to rise or fall by 10%. Assume the risk-free rate is zero. An investor sells six-month call options with a strike price $32. Which of the following hedges the position? O Short 0.3 shares for each call option sold Short 0.4 shares for each call option seid O long 0.3 shares for each call option sold long 0.4 shares for each call option sold