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The hedge ratio is defined as the number of shares required to hedge against the price risk of holding one option. A deep out-of-the-money call
The hedge ratio is defined as the number of shares required to hedge against the price risk of holding one option. A deep out-of-the-money call has the same hedge ratio as one that is less deep out-of-the-money. Appraise whether the statement is true or false, and give your reasons. (6 marks)
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