QUESTION 9 Suppose we are given the following information of a stock: S = 100, r = 5%, 0 = 30%, and the dividend yield of the stock is 3%. If an investor wants to set up a bull spread (which to long or to short) using call options at strike price of $110 and $120 with 0.5 years to maturity, then, theoretically, which of the following creates a perfect hedge for the spread? (assuming one option covers one share of stock) Shorting 0.417 share of stock Shorting 0.308 share of stock Shorting 0.108 share of stock Shorting 0.725 share of stock QUESTION 10 Which of the following regarding protective put is correct? You could buy more puts than the number of shares you currently own. The purpose of protective put is to generate additional cash flow The difference between the strike price of the put and the cost of buying the share is maximum loss If an investor add a covered call to a protective put then effectively he has a collar Click Save and Submit to sque and submit. Click Save All Answers to save all answers