Which one of the following actions would be the most appropriate hedge to a short sale of common stock?
A) sale of a call
B) purchase of a call
C) sale of a put
D) purchase of a put
Answer: B
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Convertible Bonds:
a. have priority over other indebtedness. b. are usually secured by a first or second mortgage. c. pay interest only in the event earnings are sufficient to cover the interest. d. may be exchanged for equity securities.
Which of the following statements pertaining to life policy assignment is NOT correct?
A) To secure a loan, the policy temporarily can be transferred to the lender as security for the loan. B) The life insurance company assumes no responsibility for the validity of an assignment. C) The policyowner must obtain approval from the insurance company before a policy can be assigned. D) The policyowner must notify the company in writing of any assignment."