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Number 7 You own 50 shares of a stock worth $100 per share. What nancial derivative would you use to hedge your position in the
Number 7 You own 50 shares of a stock worth $100 per share. What nancial derivative would you use to hedge your position in the stock? Draw a graph with value on the y axis and stock price on the x axis. Draw a line for a position in the stock with no hedge. Draw a second line for a position in the stock with a hedge. Label each line. The derivative costs $20 and the strike price is $98. What is the most you can lose with this hedged position?
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