Question: QUESTION 2 Using the same parameters as for the stock and call option in the 2-period BOPM problem for this quiz, answer the following question:

QUESTION 2 Using the same parameters as for the stock and call option in the 2-period BOPM problem for this quiz, answer the following question: You are an option market maker who has a long position of owning 20 of these call contracts, CS-553.50, X-$55, T-2 periods). You want to hedge your exposure by taking a position in the underlying stock to set up a position at time zero that will be hedged over the first period in the life of the option What position should you take in the stock? (choose the best answer) A Short 3675 shares of stock B. Short 1088 shares of stock OC. Golong (buy) 1088 shares of stock D. Golong (buy) 3675 shares of stock, QUESTION 2 Using the same parameters as for the stock and call option in the 2-period BOPM problem for this quiz, answer the following question: You are an option market maker who has a long position of owning 20 of these call contracts, CS-553.50, X-$55, T-2 periods). You want to hedge your exposure by taking a position in the underlying stock to set up a position at time zero that will be hedged over the first period in the life of the option What position should you take in the stock? (choose the best answer) A Short 3675 shares of stock B. Short 1088 shares of stock OC. Golong (buy) 1088 shares of stock D. Golong (buy) 3675 shares of stock

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