Question: Part A) Using options on an asset you dont own is called: A) speculation. B) a naked position. C) hedging. D) a covered position. Part

Part A) Using options on an asset you dont own is called:

A) speculation.

B) a naked position.

C) hedging.

D) a covered position.

Part B) You are short both a put option and a call option on Rockwood stock with the same expiration date. The exercise price of the call option is $40 and the exercise price of the put option is also $40. Graph the payoff of the combination of options at expiration.

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