SIE Exam Question 442: Answer and Explanation

Question: 442

A hedge fund manager that is long large cap US stocks in the fund's portfolio may hedge his risk by

  • A. Buying Russell 2000 index puts
  • B. Selling Russell 2000 index calls
  • C. Selling S&P 500 index calls
  • D. Buying S&P 500 index puts

Correct Answer: D

Explanation:

D: The S&P 500 is the broadest measure of the American economy and contains all large cap stock. Buying puts can hedge the long stock fund's risk in its portfolio.

All content of site and practice tests © 2022 Jack.
Quick View

FINRA Practice Tests