Question: 8.13) Which statement regarding ITM/ATM/OTM hedging are correct? A Expensive OTM options offer better protection in terms of a lower maximum loss B Hedging with

8.13) Which statement regarding ITM/ATM/OTM hedging are correct? A Expensive OTM options offer better protection in terms of a lower maximum loss B Hedging with an at-the-money option leads to under hedging C OTM options are less expensive. This means that when they are not exercised, the loss is smaller. Please elaborate and explain.

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