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You Own Shares of a Stock and Believe the Stock

Question 32

Multiple Choice

You own shares of a stock and believe the stock price will increase in the future. However, you realize the stock price could decline and want to hedge that risk. Which one of the following option positions should you take to create the desired hedge?


A) Buy a call
B) Sell a call
C) Buy a put
D) Sell a put
E) No option position will create the desired hedge.

Correct Answer:

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