Question
Karim holds 1000 shares of ABC, which have appreciated 30% in value. Karim would like to continue holding the shares because they pay an attractive
Karim holds 1000 shares of ABC, which have appreciated 30% in value. Karim would like to continue holding the shares because they pay an attractive dividend. However, he believes that the shares do not have significant appreciation potential in the near-term. Which derivative strategy will allow him to maximize his income from the shares?
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| Long Put | |
|
| Short put. | |
|
| Short Uncovered Call | |
|
| Short Covered Call |
Which of the following is an appropriate hedging strategy if someone owns the underlying security?
|
| Buy a futures contract | |
|
| Buy a call option | |
|
| Buy a put option | |
|
| Buy a forward contract |
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