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user100 [1]
3 years ago
6

he hedge ratio of an at-the-money call option on IBM is 0.35. The hedge ratio of an at-the-money put option is -0.65. What is th

e hedge ratio of an at-the-money straddle position on IBM
Business
1 answer:
Kazeer [188]3 years ago
5 0

Answer:

- 0.30

Explanation:

Given the following :

Hedge ratio of an at-the-money call option on IBM = 0.35

Hedge ratio of an at-the-money put option = - 0.65

Hedge ratio of an at-the-money straddle =?

Hedge ratio of an at-the-money straddle is given by :

(Hedge ratio of an at-the-money call option + Hedge ratio of an at-the-money put option)

Hedge ratio of an at-the-money straddle :

(0.35 + (-0.65))

= (0.35 - 0.65)

= - 0.30

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Which of the following is not a broad, cost classification category typically used in activity-based costing? Batch-level. Facil
crimeas [40]

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Which methods of evaluating a capital investment project use cash flows as a measurement basis?
bixtya [17]
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6 0
3 years ago
Read 2 more answers
The long-run aggregate supply curve
pantera1 [17]

Answer:

Option 1 - The long-run aggregate supply curve  is very sensitive to changes in the price level.

Explanation:

The long-run aggregate supply curve, LRAS, is a curve that reveals the relationship between the price level and real GDP that would be supplied if all prices, including nominal wages, were fully flexible; price can change along the LRAS, but the output cannot because output reflects the full-employment output.

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8 0
3 years ago
Bob consumes food and housing. Suppose his marginal utility from an additional unit of food is 20 and his marginal utility from
lozanna [386]

Answer:

Option (E) is correct.

Explanation:

For utility maximization,

Bob's consumption of Housing and food should be such that:

\frac{Marginal\ utility\ of\ housing}{Price\ of\ housing}=\frac{Marginal\ utility\ of\ food}{Price\ of\ food}

Here,

\frac{Marginal\ utility\ of\ housing}{Price\ of\ housing}=\frac{100}{2}

                                                                                              = 50

\frac{Marginal\ utility\ of\ food}{Price\ of\ food}=\frac{20}{1}

                                                                                   =20

Bob is not maximizing utility, as these two terms are not equal(50 > 20).

Since the marginal utility per rupee spent on housing is greater than that on food.

Hence, Bob can increase his utility just by consuming more of housing and less of food.

7 0
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