Delta,gamma,and vega hedging is rather complex.Identify the false statement.
A)Requires the use of four hedging instruments
B)At least one of the instruments has to be an option
C)Involves designing a portfolio where delta,gamma,and vega are set equal to zero
D)Typically involves the solution to three simultaneous equations
E)All of the above statements are true

Question

Quizplus · Accepted Answer

Delta, gamma, and vega hedging typically requires the use of three hedging instruments, not four. These instruments can include options, futures contracts, and/or the underlying asset.

Delta,gamma,and Vega Hedging Is Rather Complex