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A Portfolio Consists of 225 Shares of Stock and 300

Question 63

Multiple Choice

A portfolio consists of 225 shares of stock and 300 calls on that stock. If the hedge ratio for the call is 0.4, what would be the dollar change in the value of the portfolio in response to a $1 decline in the stock price?


A) −$345
B) +$500
C) −$580
D) −$520

Correct Answer:

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