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4. The current price of a non-dividend-paying stock is $40. Over the next year it is expected to rise to $42 or fall to $37.
4. The current price of a non-dividend-paying stock is $40. Over the next year it is expected to rise to $42 or fall to $37. An investor buys one-year call options with a strike price of $41. Which of the following is necessary to hedge the position
A- Buy 0.2 Shares for each option shorted
B- sell 0.2 Shares Shares for each option shorted
C- Buy 0.8 Shares Shares for each option shorted
D- sell 0.8 Shares Shares for each option shorted
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