14. A hedge ratio of 0.70 implies that a hedged portfolio should consist of A. long -70 calls for each short stock B. long -70 shares for each long call C. long -70 shares for each short call D. short.70 calls for each long stock E. None of the above 15. According to the put-call parity theorem, the payoffs associated with ownership of a call option can be replicated by A. shorting the underlying stock, borrowing the present value of the exercise price, and writing a put on the same underlying stock and with the same exercise price B. buying the underlying stock, borrowing the present value of the exercise price, and buying a put on the same underlying stock and with the same exercise price C. buying the underlying stock, borrowing the present value of the exercise price, and writing a put on the same underlying stock and with the same exercise price D. shorting the underlying stock, lending the present value of the exercise price and buying a put on the same underlying stock and with the same exercise price E. shorting the underlying stock, borrowing the present value of the exercise price, and writing a put on the same underlying stock and with a different exercise price 16. You are considering purchasing a put option on a stock with a current price of R33. The exercise price is R35, and the price of the corresponding call option is R2.25. According to the put-call parity theorem, if the risk-free rate of interest is 4%, and there are 90 days until expiration, the value of the put should be A. R2.25 B. R3.91 C. R4.05 D. R5.52 E. R2.05 >