Chapter 05 · Section 5.1

Hedging Long Positions

A long stock position implies:

a) a loss potential equivalent to the price paid for the stock;
• b) a loss potential equivalent to the premium of an option on this stock;
  No. If you own 100 shares, your risk is to lose the whole value of the stock position.
  c) unlimited profit potential;
  d) limited profit potential.
  e) a and c
  f) b and d

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