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Nutka1998 [239]
3 years ago
8

Which of the following is true of investors using options to manage​ risk? A. Investors can hedge against a price decline by buy

ing a call option. B. Investors can hedge against a price decline by buying a put option. C. Options suffer a loss if the value of the asset moves in the opposite direction of that being hedged against. D. Options are less expensive than other hedging devices.
Business
1 answer:
Virty [35]3 years ago
3 0

Answer:

A. Investors can hedge against a price decline by buying a call option.

Explanation: Investment risk can be defined as the probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

Buying a call option entitles the buyer of the option the right to purchase the underlying futures contract at the strike price any time before the contract expires. Most traders buy call options because they believe a commodity market is going to move higher and they want to profit from that move.

A call option is a contract the gives an investor the right, but not the obligation, to buy a certain amount of shares of a security at a specified price at a later time.

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2 years ago
According to the IASB Framework for the Preparation and Presentation of Financial Statements, the qualitative characteristic of
Alexus [3.1K]

Answer:

NEUTRALITY, COMPLETENESS AND FREE FROM ERRORS.

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3 years ago
There is a _______ relationship between real GDP and tax revenues, which partially explains deficit spending during a recession.
chubhunter [2.5K]

Answer: positive

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The real gross domestic product refers to the value of the output in an economy which has been adjusted for price changes.

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2 years ago
Suppose the government misjudges the natural rate of unemployment to be much lower than it actually is, and thus undertakes expa
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2. in the short run, as aggregate demand increases, unemployment is reduced.

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3 years ago
Read 2 more answers
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