1. Petra plans to sell short stock of Thumbnail Corp. Which one of the following basic

option strategies would she use to hedge the short sale?

( A) Buy a call.

( B) Write a call.

( C) Write a put.

D) Buy a put.

2. Which of the following are options trading on organized exchanges protected

against?

1>Default

2>Inflation

3>Interest Rate Changes

4>Stock Dividends

5>Stock Splits

A. 1, 4 and 5

B. 1,3 and 5

C. 1,2 and 3

D. 2,3 and 4

PLEASE ANSWER BOTH!! THANK YOU