Question
You are long a call option on stock ABC. You have delta-hedged your position. You hear on the radio that the CEO of ABC has
You are long a call option on stock ABC. You have delta-hedged your position. You hear on the radio that the CEO of ABC has been arrested for running a massive Ponzi scheme. The stock price of ABC drops. Explain (qualitatively) how you would adjust your hedge.
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Financial Markets And Institutions
Authors: Anthony Saunders, Marcia Millon Cornett
1st International Edition
0071181334, 9780071181334
