Quiz Ch 16 – Hedge Ratios for Long Call and Put Positions
Essentials of Investments
Bodie, Kane, and Marcus
12th Edition
What are the respective hedge ratios for long call and long put positions?
What are the respective hedge ratios for long call and long put positions?
What range do hedge ratios for long calls always fall within?
What trio of stock price, exercise price, and option cost is linked with an American call option?
How does a higher-dividend payout policy affect the value of a put option and a call option, respectively?
How will the value of Investor A’s call option and the value of Investor B’s put option change when interest rates rise, assuming all else remains constant?
How do the values of N(d1) and N(d2) change in the Black-Scholes model as the stock price rises, for both call and put options?
What happens to the value of a call option when the stock price rises by one dollar?
How will the value of Investor A’s call option and the value of Investor B’s put option to change as the time to expiration nears?
How does an extended time to maturity unequivocally impact the value of a call option?
How does the concept of “smirk” in the Black-Scholes option model impact different aspects of options pricing?