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Hedge Ratio 1.Suppose you decide to buy 1000 call options. Suppose further that youwant to hedge this long position in the call option. 2.How many

Hedge Ratio

1.Suppose you decide to buy 1000 call options. Suppose further that youwant to hedge this long position in the call option.

2.How many shares do you have to buy or sell to hedge this long position in the call option?

3.How can you use thehedge ratio (h) to determine the number of shares?

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