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An investor is short stock at $70. If the stock's market price is $40, and the investor anticipates the price will continue to decline, to hedge against a rise in the price, the investor should

Respuesta :

Answer:

A. Buy a call

Explanation:

In the case when the investor purchase a call on the stock so the investor has the right to purchase for repurchase for a fixed price

Also the right way is to hedge a non-realized profit for a stock position i.e. short for purchasing a call

Therefore in the given situation, the correct option is A.

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