1. Give 2 examples of operational hedges and 2 examples of financial hedges for a firm operating in an international environment.
2. The replicating portfolio for a put option is created by ________ a fraction of a share of the underlying stock and ________ a risk-free loan
Buying / Lending
Buying / Borrowing
Selling / Lending
Selling / Borrowing
3. You can use put-call parity to price a put option using the Black-Scholes formula for the price of a call option.
True
False