Compared to short hedging, the advantage to using a put option is: A. Put options involve a one-time fixed payment and no need for a margin account B. Put options provide a form of "price insurance" and protect from a worst case scenario C. Put options allow for additional price gains if futures market prices continue to increase D. All the above are advantages to using puts instead of short hedging
Compared to short hedging, the advantage to using a put option is: A. Put options involve a one-time fixed payment and no need for a margin account B. Put options provide a form of "price insurance" and protect from a worst case scenario C. Put options allow for additional price gains if futures market prices continue to increase D. All the above are advantages to using puts instead of short hedging
Chapter7: International Arbitrage And Interest Rate Parity
Section: Chapter Questions
Problem 4BIC
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Compared to short hedging, the advantage to using a put option is:
A. Put options involve a one-time fixed payment and no need for a margin account
B. Put options provide a form of "price insurance" and protect from a worst case scenario
C. Put options allow for additional price gains if futures market prices continue to increase
D. All the above are advantages to using puts instead of short hedging
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