Series 7 - General Securities Representative Exam

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Hugo Farnsworth bought 10 June SPX (S&P 500 Index) 3000 Calls to hedge an underlying portfolio. Which of the following are the components of his portfolio?

Long Large Cap American Companies
A
Long Small Cap Technology Companies
B
Short Small Cap Technology Companies
C
Short Large Cap American Companies
D

Explanations

Since he is HEDGING a portfolio by BUYING calls, his underlying portfolio contains short positions. The SPX an Index of large cap companies.

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