Chapter 05 · Section 5.1
Hedging Long Positions
A long stock position implies:
c) unlimited profit potential;
No. Being in a long stock position means more than having unlimited profit potential. There is also a downside risk of the position. Another alternative is also true.
d) limited profit potential.
e) a and c
f) b and d
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;
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